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Highlights:
- The SEC has filed an appeal in the ongoing legal case against Ripple Labs, challenging the earlier ruling.
- Ripple Labs had previously secured a partial victory, but was fined $125 million for violations linked to the launch of its XRP token.
- Ripple's leadership criticized the SEC's decision to appeal, accusing the agency of prolonging an already flawed case.
The US Securities and Exchange Commission (SEC) has filed a notice of appeal in the high-profile legal battle against Ripple Labs, the company behind the cryptocurrency XRP. The filing, submitted to the Southern District of New York, indicates that the legal dispute is far from over, despite Ripple's partial victory earlier this year.
Ripple Labs had been ordered by Judge Analise Torres to pay $125 million in August for securities law violations stemming from the 2012 launch of its XRP token. This penalty was considerably lighter than the $2 billion in fines that the SEC had initially sought.
The legal battle centers around the classification of XRP as a security, which the court ruled to be true only when the cryptocurrency is sold to institutional investors, not to retail buyers. Ripple's management has expressed disappointment in the SEC's decision to appeal, with Ripple’s chief legal officer, Stuart Alderoty, calling the move "disappointing but not surprising." He argued that the appeal only prolongs what has already been a difficult situation for the SEC, asserting that the court had rejected the SEC's claim that Ripple acted recklessly.
Ripple’s CEO, Brad Garlinghouse, also voiced his frustration, stating that the SEC’s actions have not served to protect investors and have instead harmed the credibility of the agency. Garlinghouse claimed that Ripple, the wider cryptocurrency industry, and the rule of law had already prevailed in the core aspects of the case.
SEC Chair Gary Gensler has consistently maintained a tough stance on what he views as unregistered securities offerings within the cryptocurrency sector. His hawkish approach has made him a controversial figure in the industry, with prominent voices, including political figures like Republican presidential candidate Donald Trump, vowing to dismiss Gensler if elected.
