Ripple and SEC Both File Appeals as XRP Legal Dispute Intensifies

The protracted legal battle between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) over the cryptocurrency XRP has taken a new turn, with both parties filing appeals against a recent court ruling. This development signals a likely reopening of the case that has significant implications for the crypto industry.

Last week, the SEC initiated the appeal process, and Ripple Labs, headquartered in California, promptly responded by submitting its own appeal. The core issue at stake is whether the sales of XRP should be classified under securities laws—a question that has been at the heart of this legal tussle for over three years.

In August, the court delivered a mixed verdict that left neither side fully satisfied. The ruling stated that while Ripple did not violate securities laws when selling XRP to retail investors, it did infringe upon those laws in transactions involving institutional investors. Consequently, Ripple was fined $125 million, a figure substantially lower than the $4 billion the SEC had originally sought. Notably, Ripple has yet to pay this penalty.

Stuart Alderoty, Ripple's Chief Legal Officer, announced on the platform X (formerly known as Twitter) that the company filed a Form C, outlining the specific points it intends to challenge in its appeal. Ripple's primary contention revolves around the classification of institutional XRP sales, arguing that these should not be deemed securities transactions.

Alderoty emphasized that the debate has shifted away from whether XRP is inherently a security—a point on which the court ruled in Ripple's favor. He noted that the SEC is not disputing this aspect of the decision, which now stands as established legal precedent.

The SEC's appeal focuses less on the inherent nature of XRP and more on specific sales conducted by Ripple to cryptocurrency exchanges and its own employees. This narrow focus suggests that the forthcoming legal proceedings may progress more swiftly than previous ones. Alderoty expressed optimism that the next phase will avoid the protracted disputes over document disclosures that characterized earlier stages of the case.

As both parties prepare for the next round in court, the timeline for the proceedings remains uncertain. The outcomes of these appeals could have far-reaching effects on how cryptocurrencies are regulated and classified in the United States.

The mutual appeals filed by Ripple and the SEC mark a significant escalation in their ongoing legal conflict over XRP. With both sides seeking clarity on different aspects of the initial ruling, the case is poised to set important precedents for the cryptocurrency industry. Stakeholders and observers alike will be watching closely as the situation unfolds, given its potential impact on regulatory approaches to digital assets.

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