Ripple maintains its steadfast stance, dismissing the SEC’s most recent appeal as a vain repetition of previous arguments.
The United States Securities and Exchange Commission (SEC) has submitted its initial brief in an effort to challenge a court decision that currently favors Ripple.
The SEC states in its January 15 filing that Ripple’s XRP sales to retail purchasers should be classified as unregistered securities transactions.
As per the Securities and Exchange Commission (SEC): “The district court made a mistake in its factual and legal determination that the sales and offers of XRP by the defendants to individuals who bought on crypto asset trading platforms, including retail investors, and by Ripple to entities that paid non-cash for XRP were not investment contracts.”
The financial regulator also contended that Ripple’s activities cultivated profit expectations among purchasers, thereby satisfying the criteria for an investment contract under the Howey Test.
In light of this, the financial regulator requested that the appeals court reverse the lower court’s erroneous decision.
The SEC’s appeal is a response to its partial defeat in July 2023, when Judge Analisa Torres determined that only XRP sales to institutional investors qualified as securities. The SEC sought a reversal of the court’s determination that sales to retail investors did not violate US federal securities statutes.
The investigation commenced in December 2020 and concluded in August 2024 with a $125 million sanction for Ripple. Nevertheless, the ongoing legal dispute has been further complicated by the SEC’s appeal.
Stuart Alderoty, Ripple’s Chief Legal Officer, has rejected the SEC’s appeal as a rehash of arguments that have already been rejected in court.
Alderoty underscored that Ripple’s resilience is unwavering, and he regarded the SEC’s actions as a hindrance to expanding regulatory clarity. He declared that the organization would respond to the brief in a formal manner while maintaining its emphasis on expansion amid an evolving regulatory landscape.
Additionally, he stated, “The SEC’s lawsuit is mere chatter. A new era of pro-innovation regulation is on the horizon, and Ripple is flourishing.”
Brad Garlinghouse, the CEO of Ripple, concurred with this sentiment, stating: “[The SEC’s brief is] a prime example of insanity…the act of repeatedly performing the same action and anticipating a different outcome.” Gensler’s SEC sincerely considered this.
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