Ripple CLO Stuart Alderoty has reacted to the SEC’s opening appeal brief in the regulator’s lawsuit against the crypto payments company.
As expected, the U.S. SEC filed its opening appeal brief yesterday, challenging Ripple’s victory in their multi-year legal tussle.
Ripple CLO Portrays SEC Appeal as “Noise”
Shortly after the filing, Alderoty characterized the SEC appeal as a repetition of arguments that a district court had already rejected.
He indicated that the SEC’s appeal against Ripple’s victory lacks merit and will likely be abandoned by the incoming administration. In the meantime, the Ripple CLO emphasized that the company will respond to the SEC appeal brief in due time.
Notably, he portrayed the SEC lawsuit as “noise,” suggesting that the case is more of a distraction than a threat to Ripple’s business, which he claimed is thriving.
Furthermore, Alderoty indicated that the United States would soon welcome a new era supporting pro-innovation regulation. His comment reassures Ripple stakeholders and the broader XRP community that the SEC lawsuit does not threaten the company’s operations.
Overview of SEC v. Ripple Appeal
Interestingly, he attached a link to the commentary, enlightening the broader crypto community about the appeal. Per the document, Ripple provided an overview of the SEC lawsuit, which it claimed to be politically motivated.
The company emphasized that although the SEC lost all key issues of the case, it still chose to appeal. Nonetheless, Ripple is determined to fight against the SEC’s overreach, aiming to defend itself and the broader crypto community.
The document educates the crypto community by clarifying the facts about the SEC appeal and Ripple’s cross-appeal.
Parties Not Appealing Whether XRP Is a Security
Notably, Ripple emphasized that the appeal does not challenge whether XRP is a security. Recall that Judge Analisa Torres declared that XRP is not a security in her landmark July 2023 decision.
According to Ripple, both the SEC and its lawyers affirm that XRP, on its own, does not constitute a security. This gives XRP legal clarity, aligning the coin with Bitcoin and Ethereum, which were previously labeled non-securities.
Furthermore, the document stated that the SEC’s appeal revolves around whether Ripple’s sales of XRP on digital exchanges and its other distributions of the token qualify as investment contracts, a special type of security.
Ripple said the SEC is challenging the district court’s decision that these transactions do not require securities registration.
Conversely, the company said it is cross-appealing the district court decision to preserve its defense, which includes that a transaction can only be deemed as an investment contract when it has contractual rights and obligations.
Ripple’s cross-appeal is focused on overturning the decision on institutional sales of XRP, which Judge Torres declared in SEC’s favor.
Notably, the appeal is filed in the Court of Appeals for the Second Circuit. The SEC filed its opening brief yesterday despite Ripple requesting that the filing be postponed.
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