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Ripple's XRP Battle: SEC Removes Lawsuit, Appeal Heads to Court of Appeals

Coin WorldTuesday, Jan 28, 2025 3:56 pm ET

1min read

The U.S. Securities and Exchange Commission (SEC) has removed the Ripple lawsuit from its website as the case progresses to the Court of Appeals for the Second Circuit. This development signals a significant milestone in the ongoing legal dispute over the classification of XRP, Ripple's native cryptocurrency.

A user on Xnoted pointed out that the removal of the civil actions from the SEC's website does not impact the active status of the appeal in the Court's nationwide PACER system. The user, identifying as an attorney, confirmed that the last entry in the case is Ripple's request for a time extension to file its brief, with the case status still listed as 'Active'.

As of January 23, 2025, Ripple has formally requested a due date of April 16, 2025, to file its response brief, according to a filing by Ripple's legal team. This follows the SEC's January 15, 2025, opening brief, in which the agency sought to overturn key aspects of the prior ruling, particularly regarding XRP sales to retail investors.

The district court previously ruled that while XRP itself is not a security, Ripple's direct sales to institutional investors constituted securities transactions. The court determined that sales through secondary trading platforms did not qualify as securities. The SEC now contends that retail investors would have expected profits based on Ripple's promotional efforts.

Ripple CEO Brad Garlinghouse described the appeal as "doing the same thing over and over and expecting different results," while Stuart Alderoty, Ripple's Chief Legal Officer, characterized it as a "rehash of already failed arguments." The original $125 million civil penalty against Ripple remains in effect, significantly lower than the SEC's initial $1 billion demand.

The outcome of the case at the appellate level is expected to shape the regulatory framework for digital assets and their classification in the US, with potential implications for the broader cryptocurrency industry.

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