The U.S. Securities and Exchange Commission (SEC) is ramping up its legal battle against Ripple by appealing the recent ruling from the Second Circuit Court of Appeals.
The SEC argues that the district court’s decision conflicts with longstanding decisions of the Supreme Court and the bedrock securities laws. At an earlier stage, Ripple was facing a civil penalty of $125 million, an amount far from the $2 billion earlier demanded by the SEC.
In fact, the CEO of Ripple, Brad Garlinghouse, took to X to share that he could not believe it, saying he would have thought it rational if SEC Chair Gary Gensler had let this case go. Garlinghouse swiped at the SEC for failing to protect the investor, stating that the litigation has impugned its credibility alone. He said the non-security classification status of XRP was “now cemented in place” after the appeal by the SEC.
Ripple legal perspective on SEC strategy
Ripple’s Chief Legal Officer, Stuart Alderoty, added that he found the commission’s decision to appeal disappointing-though hardly surprising. He observed that the court had already rejected the commission’s argument that Ripple acted negligently and that it had failed to charge any case of fraud or to show any evidence of investor losses.
Alderoty berated the SEC’s approach, saying that the agency was waging “litigation warfare” against the cryptocurrency industry instead of adhering to the rule of law.
He spoke of a cross-appeal and once reaffirmed Ripple’s determination to defend its position in the court. Alderoty also pointed out one more very suspicious coincidence, the SEC’s Enforcement Director resigned just at this point in time.
Lawyer Jeremy Hogan also commented on the appeal, saying that the SEC had made a big miscalculation. He even thought that if the SEC won it, it would be primarily a financial outcome and wouldn’t really impact the status of the XRP.
He outlined that the appellate process will likely extend into late 2025 or early 2026, expressing skepticism over the SEC’s chances of success. Hogan also noted the timing of key personnel changes within the SEC, suggesting that new leadership could potentially expedite a resolution.
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