The Securities and Exchange Commission (SEC) is appealing a federal judge’s ruling in its yearlong legal battle against Ripple over sales of its XRP token.
This extends the battle over whether Ripple violated securities laws, as an SEC spokesperson told CoinDesk, “We believe that the district court decision in the Ripple matter conflicts with decades of Supreme Court precedent and securities laws and look forward to making our case to the Second Circuit.”
In August, a federal judge in the Southern District of New York fined Ripple $125 million despite the SEC asking for a much higher penalty of $2 billion. The much lighter punishment partly stems from an earlier ruling. In 2023, Judge Analisa Torres decided that while Ripple defrauded institutional investors by selling them unregistered securities in the form of its XRP token, Ripple’s programmatic sales of XRP to retail exchanges weren’t unregistered securities.
The SEC filed a notice to appeal with the Second Circuit Court of Appeals on Wednesday. A day prior, Bitwise Asset Management Inc. submitted a filing to the SEC for an exchange traded fund that invests directly in XRP, Bloomberg reports. XRP dropped as much as 11 percent after the SEC filed its appeal.
In a post on X, Ripple CEO Brad Garlinghouse said the SEC and its chair, Gary Gensler, were acting irrationally. Stuart Alderoty, Ripple’s Chief Legal Officer, called the SEC’s appeal “disappointing but not surprising.”