SEC Intensifies Legal Battle: Appeal Against Ripple Over XRP

January 15, 2025 — The U.S. Securities and Exchange Commission (SEC) has taken a decisive step in its legal fight against Ripple Labs, filing an appeal that seeks to overturn a key ruling regarding the classification of XRP. The SEC argues that the XRP tokens sold to retail investors should be classified as unregistered securities.

A Case in Evolution

In its filing with the Second Circuit Court of Appeals, the SEC contended that a New York district court erred in ruling that XRP sales to retail investors did not constitute an unregistered securities offering. The SEC is asking the appellate court to overturn the July 2023 ruling by Judge Analisa Torres, which determined that XRP was a security only when sold to institutions.

The SEC also claims that XRP given as compensation to employees and in business transactions was wrongly excluded from being classified as a security. This appeal follows a lawsuit filed in December 2020, where the SEC has faced criticism for its approach.

Ripple’s and Market Reactions

Ripple CEO Brad Garlinghouse expressed frustration in a post on X, stating that the SEC is «doing the same thing over and over and expecting different results.» Ripple’s General Counsel Stuart Alderoty described the SEC’s appeal as a «rehash of already failed arguments.»

Cryptocurrency attorney Jeremy Hogan also criticized the filing, suggesting it lacked solid evidence showing that retail investors were aware of Ripple’s promises.

Despite the legal controversy, XRP has seen a 10% increase in the last 24 hours, reflecting a general optimism in the cryptocurrency market.

What’s Next?

The appeal process could take months, with Ripple having the opportunity to submit counterarguments. Additionally, Ripple has appealed the part of the ruling that orders it to pay a $125 million civil penalty for aspects of the case it lost.

With XRP’s future at stake, the cryptocurrency community is closely watching how this legal battle unfolds.