Ripple to file Form C as SEC prepares for appeals battle over XRP sales

Ripple's team shows confidence in overturning the court's decision on XRP.

Author: Jakub Porzycki

Key Takeaways

• Ripple's Form C will provide clarity on its arguments against the SEC's position and outline the specific rulings it is contesting.
• Ripple's executives express strong confidence in winning the appeal in the Second Circuit.

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Ripple will file a Form C civil appeal to provide clarity on its arguments against the SEC’s position today. The filing will detail the aspects of the court’s ruling on August 7 that Ripple is challenging, particularly concerning the classification of XRP in institutional sales.

Following the August final judgment, the SEC initiated an appeal against Judge Analisa Torres’ decision that Ripple’s sales of XRP on retail exchanges did not violate federal securities laws.

The SEC aims to contest that ruling, arguing that these sales should be classified as securities transactions. It is also appealing Ripple’s distribution of XRP to employees and other parties, as well as executives’ XRP offers and sales, which were also determined as non-securities by Judge Torres.

In response to the SEC’s move, Ripple has filed a cross-appeal with the US Court of Appeals for the Second Circuit. The cross-appeal aims to challenge the court’s finding that Ripple’s institutional sales of XRP constituted unregistered securities offerings.

The filing of Form C is an essential part of Ripple’s legal strategy, as it sets the stage for the arguments that will be presented in court. Both parties will then agree on a briefing schedule, which will likely extend the legal battle to the next year.

In a recent interview with FOX Business journalist Eleanor Terrett, Ripple executives Brad Garlinghouse and Stuart Alderoty, expressed strong confidence in overturning the decision that their institutional sales of XRP constituted unregistered securities.

They believe the Second Circuit will likely reverse this decision due to the court’s history of disliking regulatory overreach.

“The second circuit traditionally, is not a fan of the SEC. They’re not a fan of regulatory overreach. And statistically, if you lose, your chances of getting the Second Circuit to reverse are around 10% or less,” Alderoty said. “I don’t like to predict results, certainly not guarantee results, but I feel very good about the Second Circuit result.”

The SEC has actively targeted several crypto businesses for the same reason: they offer unregistered securities tokens. A Ripple victory in the Second Circuit could curtail the regulator’s reach over the crypto sector. However, even if the SEC loses, there remains a possibility of the case ascending to the Supreme Court.

Addressing the potential for a Supreme Court case, Garlinghouse said he was confident that Ripple would win, and that the SEC’s aggressive stance against the industry was doomed to fail.

“I believe we’re on the right side of the law. I think we’re on the right side of history,” he said.

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