SEC’s XRP Appeal: Ripple’s Legal Fight Heats Up Again
The SEC’s appeal against Ripple’s XRP ruling could reshape US crypto regulations, sparking a renewed legal fight with major implications for the industry.
The US SEC has reignited its legal battle against Ripple, challenging a court’s ruling that XRP is not a security. The SEC’s appeal could reshape crypto regulations in the US, prompting new uncertainties for the industry.
Ripple’s CEO, Brad Garlinghouse, slammed the SEC's persistence, arguing that the agency is needlessly prolonging the issue. “XRP’s non-security status is the law of the land,” he stated, emphasizing that the appeal is a waste of resources.
Back in July 2023, Judge Analisa Torres ruled that XRP was not a security for retail sales, freeing $757 million in transactions from strict regulation. However, the SEC now wants to reverse this decision at the 2nd US Circuit Court of Appeals in Manhattan, a move that could tighten the rules for digital assets.
The previous ruling wasn’t a complete win for Ripple. The judge agreed with the SEC that $728 million in XRP sales to institutional investors should follow securities laws. As a result, Ripple faced a $125 million fine in August 2024, although the penalty is currently on hold pending the appeal.
Garlinghouse views the SEC’s appeal as an attack on clarity for the crypto industry, warning that the agency’s approach could stifle innovation. This battle over XRP’s classification is not just about Ripple, but about the future of digital assets under US law. The case’s outcome will shape the treatment of cryptocurrencies and could impact the operations of other major players. The 2nd Circuit’s decision will be crucial for defining what qualifies as a security in the crypto space.
In a related development, the SEC’s Director of Enforcement, Gurbir S. Grewal, announced his departure, effective October 11, 2024. Grewal led over 100 enforcement actions against crypto firms, including major cases against Binance and Coinbase. His exit raises questions about the agency’s future direction.
SEC Chair Gary Gensler praised Grewal’s tenure, highlighting his contributions to “protecting investors” and ensuring compliance. Grewal will be temporarily replaced by Sanjay Wadhwa as Acting Director, with Sam Waldon as Acting Deputy Director. This ongoing legal saga is a defining moment for the crypto industry, as the regulatory landscape remains in flux. All eyes are now on the 2nd Circuit’s upcoming ruling, which could reshape the future of XRP and other digital assets in the US market.
