Ripple Labs steps up to the challenge The SEC filed a Form C cross-appeal with the U.S. Court of Appeals for the Second Circuit challenging key aspects of the SEC litigation. The filing not only challenges a previous ruling that classified certain XRP transactions for institutional investors as securities, but also challenges the SEC's October ruling earlier this year that questioned a district court ruling in favor of Ripple. It also directly responds to the appeal on the 16th.
Ripple’s legal defense through Form C filing
Form C submission by Ripple The cross-appeal has sparked interest in both the legal and crypto worlds, with Ripple Chief Legal Officer Stuart Alderroti confirming the move in a post about X. He said the case likely won't involve as much drama as earlier in the case. . The appellate court will only review the established record, and the SEC cannot introduce new evidence or require Ripple to submit further evidence.
Today, Ripple filed Form C, listing the issues it plans to raise in its counterclaim. There are a few things to keep in mind as you proceed.
This lawsuit is not about whether XRP itself is a security. XRP is in a unique position (along with BTC) of not having clarity… https://t.co/AmFocAnbPx
— Stuart Alderoty (@s_alderoty) October 25, 2024
The appeal seeks a new review of all issues related to the case, including whether Ripple's transfers of XRP qualify as securities under the Howie test. The Howie test, established in a 1946 Supreme Court case, determines whether a transaction constitutes an investment contract by evaluating factors such as the investment of money and the expectation of profit from the seller's activities.
The request for a new review is essentially a fresh look at these complex issues and how they can be applied to cryptocurrencies and other aspects of the industry, and therefore has the potential to have a significant impact. There is.
Disputing the SEC's stance on virtual currency regulation
Ripple's Form C filing also aims to address what the SEC describes as vague and inconsistent statements regarding the application of securities laws to digital assets. The SEC has long argued that: Selling XRP is a securityRipple is required to comply with federal securities regulations. However, Ripple's latest Form C filing highlights a lack of regulatory clarity that has left the cryptocurrency industry uncertain about its compliance with SEC standards.
Based on the application of the Howey test, the court held that the sale of XRP to the general public is not a security. However, it also determined that the initial sale of XRP to institutional investors was classified as an offering of unregistered securities, and ordered Ripple to pay a $125 million civil penalty.
By requesting a de novo review and applying the Howey test, Ripple aims to overturn He was asked to pay $125 million.
The outcome of this cross-appeal could have far-reaching implications for the broader cryptocurrency industry. If the court sides with Ripple, the ruling could set a precedent for future litigation and set new limits on the SEC's enforcement of the crypto industry. A ruling in favor of the SEC could further strengthen the regulator's ability to apply securities laws to the industry.
Featured image from Fox Business, chart from TradingView
