SEC Appeals 2023 XRP Ruling, Ripple Confident in Overcoming Legal Battle

The U.S. Securities and Exchange Commission (SEC) has escalated its legal battle with Ripple, filing an opening brief just before the deadline. The brief challenges Judge Analisa Torres’ 2023 ruling that categorized XRP tokens differently for retail and institutional investors. Ripple’s leadership criticized the move, calling it a rehash of previously failed arguments and expressing confidence in the case’s resolution.

Ripple Faces SEC Appeal Over XRP Sales

The SEC submitted its filing to contest Judge Torres’ decision, which distinguished XRP transactions based on the type of investor. The regulator argued that the ruling contradicts the Howey Test, a key standard for determining securities. It claimed that the court’s interpretation undermines securities laws and investor expectations by separating institutional and retail sales.

In its filing, the SEC maintained that Ripple’s actions violated securities regulations, alleging illegal XRP sales to both investor categories. The agency accused Ripple of using marketing efforts to boost XRP’s value and lure investors. According to the SEC, such marketing activities invalidated the court’s differentiation between institutional and retail investors.

The SEC’s brief emphasized that Judge Torres’ interpretation diverges from established securities law precedents. The regulator also stated that profits do not depend on whether buyers knowingly transact directly with the issuer. It framed the court’s ruling as a misapplication of legal principles that protect investors in financial markets.

Ripple’s Leadership Criticizes SEC’s Appeal

Ripple’s Chief Legal Officer, Stuart Alderoty, dismissed the SEC’s latest move as repetitive and unpersuasive. He argued that the filing lacks substantive new arguments and merely reiterates previously rejected claims. Alderoty stated that the legal challenge would likely be abandoned under the next administration, signaling optimism about future regulatory changes.

As expected, the SEC’s appeal brief is a rehash of already failed arguments –and likely to be abandoned by the next administration. We’ll respond formally in due time. For now, know this: the SEC’s lawsuit is just noise. A new era of pro-innovation regulation is coming, and… https://t.co/3ZxO64Fs8C

— Stuart Alderoty (@s_alderoty) January 16, 2025

Ripple’s CEO, Brad Garlinghouse, also criticized the SEC’s persistence in pursuing the case, describing the legal approach as futile. He suggested the regulator’s actions represent a pattern of repeating strategies that have already failed in court. Ripple’s executives remain confident in their position and anticipate a favorable resolution.

One definition of insanity….

Doing the same thing over and over and expecting different results. Gensler's SEC really took this to heart. https://t.co/giV8GiW6qV

— Brad Garlinghouse (@bgarlinghouse) January 16, 2025

XRP and its supporters have previously accused the SEC of using delay tactics to prolong the legal proceedings. The timing of the SEC’s filing, submitted just hours before the deadline, reinforced these allegations. Ripple’s leadership emphasized that the extended legal process has strained resources and hindered progress in the crypto industry.

XRP Gains 28% Despite SEC Battle

Despite the ongoing legal challenges, XRP has emerged as a top performer in the cryptocurrency market. Data from CoinMarketCap shows that XRP’s price has risen significantly, outperforming many other major cryptocurrencies. Over the past week, XRP gained 28.77%, supported by increased investor optimism about its future.

The Ripple community remains hopeful that the case’s resolution will clarify XRP’s regulatory status and set a precedent for the crypto sector. Investors have continued to back the token, viewing the legal battle as a temporary hurdle. The market’s positive response highlights growing confidence in Ripple’s ability to overcome regulatory obstacles.

XRP’s resilience has strengthened its position among the top cryptocurrencies by market capitalization. The asset’s recent gains reflect sustained market interest despite the SEC’s persistent legal actions.

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