Ripple CEO: SEC ‘Lost on Everything That Matters’ as Appeal Looms Over XRP
Ripple Labs has committed to challenging the U.S. Securities and Exchange Commission’s (SEC) appeal of the recent court decision that ruled retail XRP sales did not violate securities laws.
In an October 3rd post on X (formerly Twitter), Ripple CEO Brad Garlinghouse promised to continue the fight to maintain XRP’s status as a non-security and push back against the SEC’s appeal. Describing the appeal as “misguided and infuriating,” Garlinghouse stated:
“Somehow, they still haven’t gotten the message: they lost on everything that matters. Ripple, the crypto industry, and the rule of law have already prevailed.”
The SEC’s appeal, filed on October 2nd, seeks to overturn a decision from the Southern District Court of New York, which determined that XRP does not qualify as a security.
In the original ruling on July 13th, Judge Analisa Torres concluded that XRP sales to retail investors did not constitute an unlawful securities offering, stating that the cryptocurrency does not meet the criteria outlined in the Howey test. However, the court did find Ripple’s institutional sales to be in violation of securities laws due to how they were conducted, leading the SEC to propose a hefty $1.95 billion fine.
Judge Torres reduced the penalty to $125 million and stipulated that Ripple would need to formally register with the SEC if it intends to offer securities in the future.
On September 4th, both Ripple and the SEC agreed to a stay order, where Ripple deposited 111% of the $125 million fine into a secure account while awaiting the outcome of the appeal. This move signaled the SEC’s clear intention to challenge the court’s ruling.
Ripple’s chief legal officer, Stuart Alderoty, expressed little surprise at the SEC’s decision to appeal, criticizing the agency under the leadership of Chairman Gary Gensler for waging what he referred to as “litigation warfare” against the crypto sector.
“This just prolongs what’s already a complete embarrassment for the agency,” Alderoty remarked in an October 3rd post on X, hinting that Ripple may pursue a cross-appeal if necessary.
Fred Rispoli, founder of Hodl Law, speculated that the appeals process could be drawn out, with a ruling from the Second Circuit Court of Appeals likely delayed until January 2026, or possibly as late as March or April of that year.
SEC Chairman Gensler has faced mounting criticism from U.S. lawmakers for the agency’s aggressive enforcement actions against the crypto industry. During a recent congressional hearing, Gensler was questioned over the SEC’s use of terms like “crypto asset security” and the vague language surrounding digital assets such as Ethereum.
Despite the ongoing legal challenges, Ripple remains focused on its global expansion, recently securing in-principle approval for operations in Dubai.
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