Ripple Labs has filed a cross-appeal with the U.S. Court of Appeals for the Second Circuit, challenging several elements of a key ruling in its legal battle with the Securities and Exchange Commission.
The move comes a week after the S.E.C. submitted It is a unique appeal targeting specific aspects of a 2023 court ruling that partially favored Ripple in selling XRP to investors.
The appeals process is expected to last into next year, but has already attracted significant attention because of its potential impact on the regulation of digital assets in the United States.
“The Court of Appeals has reviewed the record that has already been set, and we have an impressive record,” Stuart Alderotti, Ripple's chief legal officer, said in a statement on X on Thursday.
“The SEC cannot introduce new evidence or require further evidence, which means all the drama we experienced in litigation over documents will be gone,” he added.
Ripple's filing, dated Thursday, outlines four key issues the company plans to address.
The company's appeal centers on its argument that the institutional XRP sale should not have been classified as an unregistered securities offering, resulting in a $125 million penalty.
Ripple claims that the Southern District of New York, under Judge Annalisa Torres, incorrectly applied the definition of an “investment contract” in relation to the Securities Act of 1933.
Specifically, the company challenges the requirement that such contracts impose post-sale obligations on the seller and entitle the buyer to profit from the seller's efforts.
Additionally, Ripple claims the court overlooked widespread regulatory uncertainty surrounding how securities laws apply to cryptocurrencies.
The company alleges that the SEC failed to give it fair notice that the sale of XRP violated these laws, creating significant legal issues regarding the application of securities regulations to digital assets.
Meanwhile, regulators are appealing to dismiss charges related to Ripple's programmatic XRP sales on its digital exchange and distribution to employees, which it claims violates these laws. .
Regulators are focused on whether Ripple executives Brad Garlinghouse and Chris Larsen violated securities laws by offering what they consider unregistered sales.
Notably, the SEC did not challenge the district court's ruling that XRP itself is not a security, and this ruling remains an important victory for Ripple.
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