The U.S. Securities and Exchange Commission (SEC) ‘s 7-year-long case against Ripple could drag on after the agency filed a notice of appeal against Judge Analisa Torres’ August ruling in the landmark XRP lawsuit.
This development has sent shockwaves through the cryptocurrency market, with XRP’s value plummeting over 10% in the wake of the announcement.
The SEC’s decision to appeal comes just days before the October 7 deadline set by the court last month at the request of both parties. This move has sparked intense debate within the crypto community, with many questioning the SEC’s motives.
Ripple CEO Brad Garlinghouse expressed significant frustration with the decision to appeal, arguing that if the agency had acted rationally, it would have moved on from the case by now. He emphasized that the SEC’s actions have failed to protect investors and harmed the agency’s credibility and reputation.
“XRP’s status as a non-security is the law of the land today, and that does not change even in the face of this misguided, and infuriating appeal.” He added. He further hinted at a possible counter-appeal, asserting, “We’ll fight in court for as long as we need.”
Elsewhere, Stuart Alderoty, Ripple’s Chief Legal Officer, termed the appeal “disappointing, but not surprising.” He criticized the SEC’s approach, saying, “Instead of faithfully applying the law, this agency, under this Chair, continues to engage in litigation warfare against the industry.”
Notably, the appeal process is expected to be lengthy and complex. It will involve both parties submitting briefs to the Second Circuit Court of Appeals, with the possibility of oral arguments. While the appeal cannot be outright denied, the court could dismiss it if it lacks merit or fails to meet procedural requirements.
Importantly, Ripple is contemplating a cross-appeal, enabling them to contest specific elements of Judge Torres’ ruling, including the decisions regarding institutional sales and the $125 million penalty. Should Ripple choose this route, they have a 14-day window from the SEC’s filing to initiate their cross-appeal.
Interestingly, the SEC’s decision to appeal coincides with the resignation of its Enforcement Director, announced just hours before the appeal filing. This timing has fueled speculation within the crypto community, with some suggesting it may be related to internal disagreements or a shift in strategy.
Jake Chervinsky, Chief Legal Officer at Variant Fund, commented on the unusual nature of the Enforcement Director’s departure, stating, “It’s not normal for an SEC Enforcement Director to get disappeared like this — gone on nine days’ notice with no replacement lined up.”
That said, with the legal battle intensifying, XRP holders may bear the brunt of the ongoing uncertainty, potentially facing further consolidation or price declines if the appeal continues. At press time, XRP was trading at $0.52, reflecting a 10.60% drop in the past 24 hours.
