SEC Plans Appeal Against Ruling That XRP Sales to Retail Investors Are Not Securities, Ripple's Legal Counsel Responds

The U.S. Securities and Exchange Commission (SEC) is planning to appeal a major ruling from 2023. This ruling stated that XRP sales only count as securities when sold to institutional investors.

Stuart Alderoty, Ripple Labs' chief legal counsel, shared his thoughts on the SEC's decision in a recent post on X. He called the appeal “disappointing, but not surprising.” He believes this move just extends what he sees as a failure for the agency.

Alderoty pointed out that the court already rejected the SEC's claim that Ripple acted recklessly. There were no allegations of fraud, and importantly, there were no victims or losses involved.

He criticized the SEC for not applying the law properly. Under the current leadership, he feels the agency continues to wage war against the digital assets industry. Alderoty mentioned that Ripple is considering a cross appeal. He emphasized that the SEC’s lawsuit has been misguided from the start, and they are ready to prove it again in court.

According to legal expert James K. Filan, the SEC filed the notice to appeal on October 2nd. In October 2023, Judge Analisa Torres—who ruled that retail sales of XRP do not qualify as securities—denied the SEC's motion to appeal. She stated that the SEC failed to show how the appeal would help end the litigation.

The SEC first sued Ripple Labs in December 2020. They claimed the company violated the law by selling XRP, which is used for its payments platform, as an unregistered security.

As of now, XRP is trading at $0.517, which is an 11.94% drop over the last 24 hours.