Ripple CEO calls SEC appeal “crazy” as legal battle intensifies

3 weeks ago

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Ripple CEO calls SEC appeal "crazy" as legal battle intensifies

The SEC filed its opening brief challenging the court’s ruling in favor of ripple.

On January 15th DepositThe SEC claims that Ripple’s XRP Sales to retail buyers should be classified as unregistered securities transactions.

According to the Securities and Exchange Commission:

“The District Court erred both factually and legally in concluding that Defendants’ offers and sales of XRP to public purchasers who purchased on crypto asset trading platforms — including retail investors — and Ripple’s offers and sales of “.

The financial regulator also claimed that Ripple’s activities enhanced profit expectations among buyers, which met the criteria for an investment contract under the Howey test.

Given this, the financial regulator asked the Court of Appeal to overturn the erroneous ruling of the lower court.

The SEC’s appeal comes after its partial defeat in July 2023 when Judge Analisa Torres decided to rule Only sales of XRP to institutional investors qualify as securities. The court concluded that the sales to retail investors did not violate U.S. federal securities laws, prompting the SEC to seek to reverse that finding.

The case began in December 2020 and ended with Ripple was fined $125 million in August 2024. However, the SEC appeal added further complications to the ongoing legal battle.

Ripple replied

Stuart Alderotti, Ripple’s chief legal officer, dismissed the SEC’s appeal as a reiteration of arguments that have already failed in court.

Alderotti stressed that Ripple remains resilient, viewing the SEC’s actions as an obstacle to broader regulatory clarity. He stated that the company will formally respond to the brief while continuing to focus on growth in a changing regulatory environment.

He added:

“The SEC lawsuit is just hype. A new era of pro-innovation regulation is coming, and Ripple is thriving.”

CEO of Ripple Brad Garlinghouse I echoed this sentiment as well Saying:

“[The SEC’s brief is] One definition of insanity….doing the same thing over and over and expecting different results. Gensler’s Securities and Exchange Commission took this seriously.