Ripple Says Leaving Nothing on the Table, Files Cross-Appeal Against SEC Ruling

San Francisco-based crypto payments company Ripple officially files a cross-appeal against the SEC “to ensure nothing is left on the table.”

Ripple submitted its cross-appeal notice in the U.S. District Court of New York yesterday, requesting a review of the court’s final judgment entered on August 7, 2024. 

Notably, famous defense lawyer James K. Filan shared the development yesterday in an X post.

#XRPCommunity #SECGov v. #Ripple #XRP BREAKING: @Ripple has filed a cross-appeal of Judge Torres’s Judgment entered on August 7, 2024. pic.twitter.com/WieaeDQjcN

— James K. Filan 🇺🇸🇮🇪 (@FilanLaw) October 10, 2024

The company’s cross-appeal notice comes a week after the SEC officially appealed the Ripple decision. 

Brief Summary of Ripple Judgment 

Recall that the SEC and Ripple secured partial victories in the summary and final judgments. While the court ruled that Ripple violated securities laws through its institutional sales of XRP, it declared that the company’s programmatic sales and other distributions of the token are not investment contracts.

Consequently, the court ordered Ripple to pay a fine of $125 million for violating the law through its institutional sales. It also imposed an injunction on Ripple’s future institutional sales, ordering the company to seek the SEC’s permission before conducting these transactions. 

Ripple’s cross-appeal notice showed that the company is unsatisfied with the court’s verdict on its XRP-related institutional sales. Hence, the company seeks to overturn the decision in the U.S. Court of Appeals. 

With Ripple and the SEC seeking an appellate review of Judge Analisa Torres’ verdict, both appeals are expected to be combined into a single case in the Second Circuit. 

Ripple Wants Nothing Left on the Table 

While Ripple has yet to file its official cross-appeal brief, the company’s CLO Stuart Alderoty provided hints of what crypto enthusiasts should expect. 

According to him, the SEC appealed Judge Torres’ decision because it lost on all key aspects of the case. However, he said Ripple is cross-appealing to ensure “nothing is left on the table.” 

The company’s appeal will focus on the argument that an investment contract cannot exist without a contractual agreement outlining the rights and obligations between the parties. 

It bears mentioning that this argument relates to Ripple’s institutional sales of XRP, which Judge Torres declared a security. 

Potential SEC Appeal Brief

Furthermore, Alderoty stated what to expect from the SEC’s appeal brief. The Ripple CLO said the SEC had already confirmed that it would not appeal Judge Torres’ ruling that XRP is not a security. 

Moreover, Alderoty added that the agency apologized for suggesting in another case that a token itself can be a security, effectively affirming this position as the law. 

While the SEC may not appeal XRP’s non-security status, Alderoty believes the regulator might challenge the decision on Ripple’s programmatic XRP and other distributions to employees and developers. 

It should be recalled that Judge Torres ruled that these transactions are not investment contracts. Last year, the SEC sought an immediate appeal to challenge these decisions, but the judge denied its request. 

Even though Alderoty expected the SEC to appeal these rulings, he predicted that the regulator would lose again. In conclusion, the Ripple CLO suggested that the company is anticipating the appellate court to end the SEC’s misguided attack on the crypto industry. 

Ripple CEO Reacts 

Reacting to the development, the CEO of Ripple, Brad Garlinghouse, expressed frustration with the SEC and its chair Gary Gensler, saying the commission should not have appealed if they cared about the crypto industry. 

However, he noted that the SEC is only focused on creating havoc rather than providing clarity. Following Ripple’s cross-appeal, Garlinghouse said the company hopes to seal the SEC’s fate and end its regulation-by-enforcement agenda.