Ripple Lawsuit: U.S. SEC Appeals District Court Decision, Requesting Reconsideration on Three Key Points

The Ripple lawsuit with the U.S. SEC has entered a new phase, with the SEC appealing specific aspects of the district court's ruling.

While this move prolongs the litigation, Ripple executives have reassured the community that the critical decision—that XRP itself is not a security—remains uncontested.

As attention shifts toward the potential approval of spot XRP ETFs, XRP holders remain optimistic amidst the ongoing legal battle. Read on for detailed updates on the case and its implications.

SEC Requests Reconsideration of District Court Ruling

In the ongoing lawsuit between the U.S. Securities and Exchange Commission (SEC) and Ripple regarding the cryptocurrency XRP, the SEC submitted a civil appeal pre-argument statement (Form C) on October 17, 2024.

This filing requests the Southern District of New York federal court to reconsider aspects of its earlier ruling.

In the initial ruling made in July 2023, the Southern District Court determined that "XRP itself does not qualify as a security." However, it also found that Ripple's sales of XRP to institutional investors were classified as securities transactions, while sales to retail investors were not.

The SEC is now challenging this decision, seeking a review of the court’s judgment on three specific points:

1. Ripple's XRP Sales via Exchanges
2. Ripple’s Distribution of XRP to Employees
3. Sales of XRP by Ripple Executives, Brad Garlinghouse and Chris Larsen, through Exchanges

The Ruling That "XRP is Not a Security" Remains Unchallenged

While the SEC's appeal prolongs the litigation, Ripple’s Chief Legal Officer, Stuart Alderoty, emphasized that this move was expected and reassured that the court's ruling that "XRP is not a security" has not been appealed.

He further mentioned that Ripple’s response to the SEC's Form C would be filed next week.

The SEC vs. Ripple lawsuit has long been regarded as a critical factor that could influence XRP’s market price. However, since the ruling affirming that XRP itself is not a security remains intact, many XRP holders have expressed confidence, believing there is no cause for concern regarding this particular appeal.

In addition, growing attention has been directed toward the potential approval of spot XRP ETFs, as the number of related filings has increased in recent months.

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