The U.S. Securities and Exchange Commission (SEC) has filed an appeal in its legal battle with blockchain development company Ripple Labs, seeking to overturn a partial summary judgment made over a year ago by U.S. District Judge Analisa Torres.
Judge Torres’ ruling, issued in July 2023, favored Ripple in part, determining that the company’s sales of XRP, a digital asset, on its digital asset platform did not violate U.S. securities laws. The court found that these transactions did not meet the legal standard for investment contracts, dealing a blow to the SEC’s broader efforts to regulate cryptocurrency sales under existing securities regulations. Additionally, the judge imposed a fine of approximately $125 million on Ripple after finding that its 1,278 institutional sales transactions violated securities laws.
In the appeal filed Thursday evening with the U.S. Court of Appeals for the Second Circuit, the SEC did not challenge the above rulings. Instead, the agency focused on the portion of the judgment that deemed Ripple’s issuance and sales of XRP on digital asset trading platforms, as well as the personal sales activities of Ripple executives Bradley Garlinghouse and Christian Larsen, as not constituting illegal behavior. The SEC also objected to the judgment that distributing XRP in non-cash consideration did not violate securities laws.
Ripple’s General Counsel Stuart Alderoty responded to the SEC’s filing on Thursday on the community platform X, stating, “This comes as no surprise – the court’s ruling that XRP is not a security has not been appealed and remains the law of the land.” Alderoty also mentioned that the company plans to submit their Form C next week.
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