The Securities and Exchange Commission (SEC) today moved to appeal a federal judge's decision in its long-running lawsuit against cryptocurrency and fintech company Ripple over sales of the XRP cryptocurrency.
In a court filing Wednesday, the Wall Street watchdog filed notice with the Second Circuit Court of Appeals and said it seeks to appeal the final judgement made by U.S. District Judge Analisa Torres in August. The price of XRP, already in the red for the day, tumbled further following the news. XRP has so far shed nearly 10% of its value today, now trading for just over $0.54 per coin.
“We believe that the district court decision in the Ripple matter conflicts with decades of Supreme Court precedent and securities laws and look forward to making our case to the Second Circuit,” an SEC spokesperson told Decrypt in a statement.
The SEC in 2020 hit Ripple with a $1.3 billion lawsuit, alleging that the company sold unregistered securities in the form of the cryptocurrency XRP to investors to raise funds.
Last year, a judge ruled that programmatic sales of XRP on cryptocurrency exchanges to retail investors did not qualify as securities.
The ruling was interpreted as a win by Ripple—and the crypto industry as a whole—despite the judge also ruling that $728 million worth of tokens for institutional sales did constitute unregistered securities sales.
The SEC had requested Ripple pay a $2 billion fine, but in August, a New York court ordered the company to pay a mere $125 million penalty.
If Gensler and the SEC were rational, they would have moved on from this case long ago. It certainly hasn’t protected investors and instead has damaged the credibility and reputation of the SEC.
Somehow, they still haven't gotten the message: they lost on everything that… https://t.co/1hW7xVSL9b
— Brad Garlinghouse (@bgarlinghouse) October 2, 2024
Ripple did not immediately respond to Decrypt's request for comment. Ripple CEO Brad Garlinghouse, responding to news of the SEC's appeal, posted on X: "If [SEC Chair Gary] Gensler and the SEC were rational, they would have moved on from this case long ago. It certainly hasn’t protected investors and instead has damaged the credibility and reputation of the SEC."
The founders behind Ripple—a company which aims to speed up cross-border transactions through its tech—also created XRP, the seventh biggest cryptocurrency by market cap.
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