SEC Appeals Ripple Case Decision, XRP Price Drops Nearly 10%

The Securities and Exchange Commission (SEC) is appealing a federal judge's decision in its lawsuit against Ripple. This case involves the sales of the XRP cryptocurrency. On Wednesday, the SEC filed a notice with the Second Circuit Court of Appeals. They want to contest the final judgment made by U.S. District Judge Analisa Torres back in August.

After this news broke, XRP's price took a hit. It dropped nearly 10% and is now trading just over $0.54 per coin.

An SEC spokesperson stated, “We believe that the district court decision in the Ripple matter conflicts with decades of Supreme Court precedent and securities laws. We look forward to making our case to the Second Circuit.” In 2020, the SEC filed a $1.3 billion lawsuit against Ripple, claiming the company sold unregistered securities in the form of XRP.

Last year, a judge ruled that programmatic sales of XRP on exchanges to retail investors did not count as securities. This was seen as a win for Ripple and the crypto industry. However, the judge also decided that $728 million in tokens sold to institutional investors did count as unregistered securities sales. The SEC initially wanted Ripple to pay a $2 billion fine, but a New York court only imposed a $125 million penalty in August.

Ripple has not yet responded to requests for comment. Ripple CEO Brad Garlinghouse reacted to the SEC's appeal on social media, saying, “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.”

In other news, Michigan’s Republican Senate candidate, Mike Rogers, criticized the pro-crypto super PAC Fairshake. He noted that despite his long-standing support for crypto, Fairshake chose to support his opponent, Democrat Elissa Slotkin, instead. Rogers has actively engaged with industry groups and attended blockchain conferences, which makes this decision surprising.

Additionally, the SEC announced that Gurbir S. Grewal, the director of its enforcement division, is stepping down. Grewal has led many enforcement actions against crypto firms. He will be succeeded by Sanjay Wadha as the acting director of the division.

In a separate case, Evan Frederick Light, a 21-year-old from Indiana, pleaded guilty to stealing nearly $38 million in cryptocurrency. He hacked an investment firm and stole information from around 600 victims. Light admitted to conspiracy charges related to wire fraud and money laundering, having accessed personal identifiable information from a Sioux Falls, South Dakota-based investment company.