SEC Appeals Ripple Ruling as Deadline Passes: Legal Battle Over XRP Enters New Phase

On October 2, 2024, the U.S. Securities and Exchange Commission (SEC) officially filed an appeal in its ongoing case against Ripple Labs, just before the October 17 deadline. This appeal seeks to challenge a July court ruling that partially favored Ripple, declaring XRP not to be a security in secondary market sales. However, Ripple was fined $125 million for its institutional sales of XRP, which the court found to have violated U.S. securities laws.

Ripple CEO Brad Garlinghouse has remained optimistic, viewing the ruling on secondary sales as a significant victory for Ripple and the cryptocurrency sector as a whole. Despite the SEC’s appeal, Garlinghouse emphasized that the court’s classification of XRP in secondary markets as a non-security remains the current legal precedent. Nonetheless, the appeal extends the uncertainty surrounding Ripple’s legal battles, potentially prolonging the case for up to 18 more months.

Ripple has hinted at a potential cross-appeal to contest parts of the ruling that were not in its favor. The outcome of these legal proceedings could set critical precedents for how digital assets are regulated in the U.S., particularly regarding the classification of cryptocurrencies under existing securities laws. The case has major implications, not only for Ripple and XRP, but also for the broader cryptocurrency landscape, as it may shape how digital tokens are treated by regulators in the future.

The coming months will be crucial as both the SEC and Ripple continue their legal strategies, with the entire crypto industry watching closely for regulatory changes that could affect the market.