As a seasoned crypto investor with over a decade of experience navigating the volatile and ever-evolving digital asset landscape, I find myself closely following the latest developments between Ripple and the SEC. The recent cross appeal filed by Ripple, as announced by their Chief Legal Officer Stuart Alderoty, is a significant move that could potentially reshape the future of XRP and the broader crypto industry in the US.
The company submits a document called Ripple‘s Cross Appeal File (or simply Form C), which outlines the points they intend to argue during their upcoming appeal against the U.S. Securities and Exchange Commission regarding the issues at hand.
On October 25th, Stuart Alderoty, Ripple’s Chief Legal Officer, declared that they had submitted a Civil Appeal Pre-Argument Statement (Form C) to contest the earlier ruling regarding their institutional sales, which was made by the Southern District of New York court. Essentially, Form C is a document detailing the precise reasons why the company disagrees with the previous decision.
As a crypto investor, I’ve learned that in the recent filing, Ripple (XRP) mentioned that each point of our appeal will be reviewed under the “de novo” standard. This means the court will reconsider their past judgments, taking into account how the law was actually applied this time around.
In simpler terms, Ripple recently submitted a Form C document a few days following the SEC’s submission on October 18th. This filing came after the SEC petitioned the court to reevaluate its decision that permitted the sale of XRP tokens on exchanges, as well as personal sales by Ripple’s CEO Brad Garlinghouse and co-founder Chris Larsen.
In their argument, Ripple emphasized that the district court incorrectly applied the Howey test to their XRP transactions. According to Ripple, these transactions involved investing money, joining a collective endeavor, and anticipating returns primarily derived from Ripple’s own actions, rather than the efforts of others.
A different argument contests whether the court considered Ripple’s claim of insufficient warning during their actions, asserting that the Securities and Exchange Commission’s explanations about applying federal securities laws to digital assets and cryptocurrencies were contradictory and intentionally unclear.
Additionally, Ripple posed the question if an investment contract as defined under Section 5 of the Securities Act of 1933 necessitates certain key elements, specifically a contract that obliges the seller after the sale and grants buyers the power to claim and receive earnings.
In conclusion, Ripple poses a question about if the prerequisites outlined in Rule 65 of the Federal Rules of Civil Procedure could potentially prevent an injunction from being granted when its sole purpose is to compel the party subjected to it to comply with the law.
Concerning the broader implications, Alderoty stated about X that the central issue of the case isn’t about determining if XRP qualifies as a security. Since, under current legal classification, XRP isn’t categorized as a security on its own.
Instead, he claims that the SEC is intentionally causing “distraction and muddle” for Ripple and the broader cryptocurrency sector. Moreover, he opines that the most challenging aspects of the case have already been surmounted, as Ripple will not need to provide additional evidence or argue over documents further.
In simpler terms, “The Appeals Court examines the previously established case details… and since we have an excellent case history, the SEC is unable to introduce fresh evidence or demand additional records from us,” as expressed by Alderoty.
As a researcher involved in the Ripple case, today we submitted a Form C outlining our proposed arguments for our cross appeal. Here are some key points to bear in mind as we progress:
— Stuart Alderoty (@s_alderoty) October 25, 2024
This year, the Securities and Exchange Commission (SEC) claimed that Ripple Labs had illegally sold approximately $1.3 billion worth of XRP tokens, as the SEC considers XRP as an unregistered security. Additionally, the SEC asserted that XRP was designed to generate investor profits.
As the case moves forward to a fresh phase, both parties are gearing up for an extended court battle that might significantly shape the cryptocurrency sector within the United States.
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2024-10-25 13:22