In July 2023, the crypto market received a major boost when the court ruled that XRP should only be considered a security in direct sales to investment funds or third parties. This decision, along with the rejection of the SEC’s appeal in August 2023, was seen as a significant victory for Ripple and the entire crypto industry.
However, the battle is far from over. On October 2, 2024, under the direction of Chairman Gary Gensler, the SEC once again filed an appeal with the Court of Appeals, extending the four-year legal fight with Ripple. This move came just a few months after Judge Analisa Torres imposed a $125 million fine on Ripple for the unauthorized sale of securities through XRP tokens.
A spokesperson for the SEC stated:
We believe that the District Court’s ruling contradicts multiple precedents from the Supreme Court and securities regulations. We will continue to defend our position before the Court of Appeals.
In a swift response, Ripple CEO Brad Garlinghouse declared on platform X:
The SEC has lost on every major issue. Ripple, the crypto industry, and the law have prevailed. XRP is now confirmed to not be a security.
Meanwhile, Chief Legal Officer Stuart Alderoty expressed confidence that the Court of Appeals would uphold the previous ruling.
This development could impact the approval process for the XRP spot ETF that Bitwise filed for on the same day. If the appeal favors the SEC, the approval of the XRP ETF could be negatively affected. Conversely, if Ripple continues to prevail, the process could be expedited after regulatory clarity is established.
Related: Asset Manager Bitwise Seeks to Register XRP ETF
The market reacted quickly to the news, with XRP’s price dropping 11% within 24 hours, currently trading around $0.54. This decline is partly due to the news of the SEC’s appeal and partly due to the overall downward trend in the crypto market.
