Crypto giant Ripple is escalating its legal battle against the SEC by filing an appeal that could redefine the regulation of digital assets in the United States. This new phase of the dispute comes as the company challenges the classification of some of its XRP sales as unregistered securities.
A crucial call for the future of crypto
Ripple Labs officially filed its cross-appeal in the United States Court of Appeals for the Second Circuit on Thursday, October 24, 2024. This action follows the SEC's appeal filed a week earlier, challenging the landmark decision of 2023 which partially proved Ripple right.
Stuart Alderoty, legal director of Ripple, shows his confidence in the X platform: “ The Court of Appeal is reviewing the existing record, and we have an excellent case“. He underlines also that this phase will be distinguished from previous ones by the absence of new evidence, promising a more direct procedure.
The company notably contests the classification of its institutional sales of XRP as unregistered securities offerings, a decision which earned it a fine of $125 million.
The major issues of the appeal
At the heart of this new legal battle are four critical points that Ripple intends to defend. The company questions the court's interpretation of the definition of an “investment contract” under the Securities Act of 1933.
While this litigation highlights the regulatory challenges of the sector, some innovative companies like Wecan Group are already developing concrete solutions. This Swiss regtech, which counts the world's most prestigious private banks among its clients, offers blockchain tools allowing financial institutions to effectively manage their regulatory compliance and secure their data.
The SEC, for its part, maintains its position on programmatic sales of XRP and distributions to employees, considering them to violate securities regulations. Notably, the regulator did not challenge the ruling that XRP itself is not a security, leaving this significant victory to Ripple.
This appeal process, which is expected to continue until 2025, could set a crucial precedent for the entire crypto sector in the United States, redefining the contours of digital asset regulation.
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