Ripple Mentions XRP, As it Submits New Filing In Its Cross Appeal Against SEC, Focuses on 4 Major Issues

Ripple files its pre-argument appeal statement, outlining four issues it seeks to cross-appeal against the SEC. 

The development comes two weeks after Ripple disclosed that its appeal will ensure that “nothing is left on the table.” 

Recall that Ripple lost on the issue of institutional sales of XRP, which were deemed investment contracts. Following this verdict, the federal court imposed an injunction on Ripple’s future institutional sales and a $125 million fine. 

However, with the SEC appealing the rulings (programmatic sales and other distributions of XRP) it lost to Ripple, the payments company also filed a cross-appeal notice to specifically challenge the decision on institutional sales. 

Ripple Cross-Appeal Pre-Argument Statement 

In the filing shared by Defense Lawyer James K. Filan, Ripple outlined four issues it intends to present to the Second Circuit in the appeal. The company urged the Second Circuit to review the issues independently de novo (from scratch without relying on the district court’s decision). 

#XRPCommunity #SECGov v. #Ripple #XRP @Ripple has filed the Civil Appeal Pre-Argument Statement (Form C). The relevant pages are below. pic.twitter.com/usm3fCjG20

— James K. Filan 🇺🇸🇮🇪 (@FilanLaw) October 25, 2024

The first issue Ripple intends to present in the Second Circuit is whether the Securities Acts of 1933 require an investment contract to have an actual contract, post-sale obligations, and the buyer’s rights to profit from the seller’s efforts. 

Second, Ripple seeks to ascertain whether the district court was incorrect in declaring that some of its XRP-related transactions satisfy the three elements of the SEC’s longstanding securities test, Howey. These include an investment of money in a common enterprise, with buyers’ expectations of profit from the seller’s efforts. 

Third, Ripple’s cross-appeal will focus on its fair notice defense. Specifically, Ripple questions whether it raised a genuine dispute of fact when it proffered evidence of the SEC’s inconsistent guidance and regulatory uncertainty to argue that it lacked fair notice on whether its conduct violated federal securities laws. 

Lastly, Ripple aims to nullify the injunction order to ensure it does not affect its future business operations. Ripple quizzes whether the Rule 65 requirements prevent the injunction by simply directing the enjoined party to obey the law. 

Next Steps of the Case 

Meanwhile, FOX Business Journalist Eleanor Terrett has outlined the next step of the SEC v. Ripple lawsuit. Following Ripple’s submission of the Form C statement, the Second Circuit will now issue the scheduling order for the briefings. In a previous statement, she noted that the SEC will first file its opening appeal brief, followed by Ripple’s response. 

Afterward, Ripple will file its cross-appeal brief, and the SEC will respond to the issues. According to Ripple’s CLO Stuart Alderoty, the entire briefing might end in July 2025, nine months from now. 

Furthermore, Terrett asserted that the Second Circuit will consolidate all relevant filings, including some from the district court. 

SEC Seeks Extension of Principal Brief Filing 

In the meantime, the U.S. SEC has asked the court to extend the deadline for filing its principal appeal brief. Notably, the SEC wants the deadline extended to January 15, 2025, less than three months for now. 

#XRPCommunity #SECGov v. #Ripple #XRP The @SECGov has requested that the deadline for filing its principal brief be January 15, 2025. pic.twitter.com/GP13onXwb5

— James K. Filan 🇺🇸🇮🇪 (@FilanLaw) October 24, 2024

As expected, the development triggered reactions among XRP proponents, who suggested that the SEC has resumed its usual delay tactics, as observed at the district court level. However, the court has not decided on the SEC’s latest request.