Ripple vs SEC: The XRP battle continues

The crypto giant Ripple intensifies 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 conflict comes as the company challenges the classification of some of its XRP sales as unregistered securities.

A crucial appeal for the future of crypto

Ripple Labs officially filed its incident appeal before the U.S. 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 historic 2023 decision that partially favored Ripple.

Stuart Alderoty, Ripple’s General Counsel, expresses his confidence on platform X: “The Court of Appeals is reviewing the existing case, and we have an excellent case.” He also emphasizes 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 qualification of its institutional XRP sales as unregistered securities offerings, a decision that cost it a fine of $125 million.

The major stakes 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 regarding the definition of an “investment contract” under the Securities Act of 1933.

While this litigation highlights the regulatory challenges facing the sector, some innovative companies like Wecan Group are already developing concrete solutions. This Swiss regtech, which counts among its clients some of the most prestigious global private banks, offers blockchain tools that enable financial institutions to effectively manage their regulatory compliance and secure their data.

The SEC, for its part, maintains its position on XRP’s programmed sales and employee distributions, considering that they violate securities regulations. Notably, the regulator has not disputed the decision 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.