The U.S. Securities and Exchange Commission (SEC) is seeking to appeal a July 2023 court decision in the regulator’s case against XRP-issuer Ripple Labs.
On Wednesday, the SEC submitted a notice of appeal to the Second Circuit Court of Appeals in Manhattan — a decision that Ripple Labs’ chief legal officer Stuart Alderoty called “disappointing, but not surprising.”
Alderoty said that Ripple Labs was evaluating whether to file a cross appeal, while noting that the firm was ready to prove that the SEC’s lawsuit “has been irrational and misguided” once again in the appellate court.
Last year, U.S. District Judge Analisa Torres ruled that Ripple breached federal securities law with its institutional sales of XRP, but its programmatic sales to retail exchanges were not in violation of securities regulations.
In August, Judge Torres ordered Ripple to pay a $125 million fine — significantly lower than the $2 billion in disgorgement and civil penalties originally requested by the SEC.
The price of XRP dropped after news of the SEC’s appeal, and was trading at $0.54 at the time of writing, down more than 10% in the last 24 hours.
“If Gensler and the SEC were rational, they would have moved on from this case long ago. It certainly hasn’t protected investors and instead has damaged the credibility and reputation of the SEC,” said Ripple CEO Brad Garlinghouse in a post on X.
Incidentally, earlier in the day, the SEC announced that the Director of its Enforcement Division Gurbir Grewal would be leaving the agency.
Grewal, who has led the unit since July 2021, brought over 100 enforcement actions against firms in the crypto space, including lawsuits against Binance and Coinbase.
According to Bill Hughes, Director of Global Regulatory Matters at Consensys, it’s unlikely that Grewal’s departure has anything to do with crypto.
“Sometimes you know when you are going to exit so you can take some time off before starting your big fancy new private sector job come 2025,” said Hughes on X.
