The Securities and Exchange Commission (SEC) yesterday (Wednesday) formally moved to appeal a federal judge's decision in the regulator’s case against Ripple, which resulted in a $125 million fine.
SEC Files “Notice of Appeal”
The regulator filed a "notice of appeal" to the Second Circuit Court of Appeals, indicating its intention to challenge the final judgement by Judge Analisa Torres, who closed the four-year-old case against the crypto company last August.
A “notice of appeal” is a formal filing in a superior court by a party involved in a lawsuit, notifying the court and the opposing side of its decision to appeal.
Although the judge imposed a penalty on the blockchain company, it was significantly lower than the nearly $2 billion the SEC had sought in the form of recovery and fines.
“We believe that the district court’s decision in the Ripple matter conflicts with decades of Supreme Court precedent and securities laws, and we look forward to making our case to the Second Circuit,” an SEC spokesperson said.
Stuart Alderoty, Ripple’s Chief Legal Officer, called the SEC’s appeal “disappointing, but not surprising.” He further noted that the SEC’s Enforcement Director, Gurbir Grewal, resigned hours before the "notice of appeal" was filed.
Ripple's CEO, Brad Garlinghouse, also questioned the SEC's "rational" and highlighted that the lawsuit "hasn’t protected investors."
A Long-Running Crypto Lawsuit
The American regulator first took action against the blockchain company in December 2020, alleging the illegal sale of XRP tokens to both retail and institutional investors, raising more than $1.3 billion. According to the SEC, XRP constitutes unregistered securities.
The initial lawsuit named Ripple’s CEO, Garlinghouse, and Co-Founder, Chris Larsen; however, the charges against them were dropped last October. Last July, the New York federal court ruled that the sale of XRP on exchanges and through algorithms did not violate any American securities law, although sales to institutions did.
The $125 million penalty was related to securities law violations concerning the sale of XRP to institutions.
