Ripple Labs has officially filed a Form C in the United States Court of Appeals for the Second Circuit, taking a stand against a recent ruling by the US Securities and Exchange Commission (SEC). The filing, confirmed by Ripple’s Chief Legal Officer, Stuart Alderoty, emphasizes that the SEC cannot introduce new evidence or require Ripple to produce additional documents.
This appeal follows an August decision by the US District Court for the Southern District of New York, which imposed a hefty $125 million fine on Ripple for its institutional sales of XRP, ruling that these transactions constituted securities sales.
Ripple’s appeal specifically contests the court’s finding that its institutional sales of XRP to accredited investors should be classified as securities transactions. Central to this challenge is the application of the Howey test, a legal benchmark used to determine whether a transaction qualifies as an investment contract.
Ripple’s Form C outlines the legal grounds for its appeal, seeking a de novo review of the case. This type of review allows the appeals court to reevaluate the legal interpretations made by the district court without adhering to its prior conclusions. Alderoty expressed confidence in the appeal process, stating that the SEC’s strategy of “distraction and confusion” is now “just background noise.”
Ripple’s filing comes in the wake of an SEC appeal submitted on October 16, which challenges the district court’s partial summary judgment favoring Ripple. However, the SEC did not contest the ruling that XRP is not considered a security when sold programmatically on digital asset exchanges. Instead, it focused on reviewing the court’s application of securities law concerning institutional sales.
Judge Analisa Torres, of the US District Court for the Southern District of New York, had previously ruled in favor of Ripple in July 2023, determining that XRP is not a security in programmatic sales on digital asset exchanges. As this legal battle continues, Ripple’s appeal represents a critical moment for the company and the broader cryptocurrency industry, potentially setting important precedents for how digital assets are classified under US law.
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