The U.S. Securities and Exchange Commission (SEC) has filed an appeal against Ripple just after its original deadline passed. This appeal, submitted 24 hours late, targets specific aspects of the ongoing lawsuit. The SEC’s appeal focuses on Ripple’s programmatic sales of XRP and actions by company executives Brad Garlinghouse and Chris Larsen.
The legal battle between Ripple and the SEC over XRP has been a long, drawn-out drama. A previous court ruling found that retail transactions with XRP were not a security. However, the SEC is investigating Ripple’s sales of XRP via digital platforms and the involvement of its executives.
Ripple Executives Remain Confident Amid SEC Appeal
The SEC’s latest filing makes no headway in fighting the earlier ruling that XRP is not a security. The appeal focuses instead on sales of XRP on programmatic terms and the actions of Ripple’s leadership. The SEC also alleges that executives aided in the distribution of XRP and helped with cash and non-cash transactions.
That has raised questions about whether the SEC is on the right track by appealing just a few cases. Though Ripple’s Chief Legal Officer, Stuart Alderoty, anticipated this outcome, he contended any security status dispute of XRP was non-contestable. Ripple executives remain undaunted on the case and believe their stance remains strong.
Crypto Community Questions SEC’s Filing Timeliness
The confusion surrounding the filing deadline has added another layer of complexity to the case. Some crypto community believe the SEC missed its opportunity to appeal when it didn’t make it by the original October 16 deadline. But after a series of back-and-forth discussions over the SEC’s Form C, it became clear the SEC had another Form C window.
Complications multiplied when the SEC’s filing revealed two conflicting dates of the company’s founding, Oct. 16 and 17, sparking talk of a procedural kerfuffle. The irony is that the factors leading observers to question the discrepancy among legal experts may have ironically been the docketing lag that allowed it. However, the court officially accepted the appeal on October 17.
SEC Tightens Focus on Larsen and Garlinghouse
Larsen and Garlinghouse are again in view of the SEC as the refocusing agency tightens. They’re accused of funding the distribution of XRP directly through the sale and by paying employees. SEC continues to argue against Ripple in legal challenges, and their alleged involvement is central to that.
In spite of these allegations, the SEC has held off on overturning Ripple’s $125 million fine. The agency has also not moved to seek disgorgement, leaving its scope of appeal that much narrower. The XRP community, however, remains in suspense about the case’s legal uncertainty.
Many see the SEC’s legal strategy in the Ripple case as part of a broader regulatory approach to the crypto industry. However, the agency’s reliance on enforcement actions has come under fire, especially as it ponders how to phrase digital assets. Recently, the SEC has been attacked by different Binance, Kraken, and Coinbase lawsuits, and the term ‘crypto asset security’ on the SEC’s side has now been questioned.
The Ripple case, in particular, has also shown that the SEC needs help maintaining a coherent regulatory stance. The agency increasingly acknowledges that XRP is not a security in retail transactions. Critics charge that the SEC’s enforcement-driven approach has no regulatory guidelines and that legal battles have lasted for years.
