US Court of Appeals Sets Deadline for SEC Brief Against Ripple Labs
The US Securities and Exchange Commission (SEC) has been ordered by the US Court of Appeals for the Second Circuit to file its principal appeal brief against Ripple Labs by January 15, 2025.
Initially, the SEC requested a deadline extension until the said date, which the court approved, but also warned that the appeal would be effectively dismissed if the brief is not filed by January 15. Additionally, the court stated that any further request for an extension or other relief would not alter the filing deadline.
Background of the Case
The case stems from a ruling by Judge Analisa Torres in 2023, which found that sales of Ripple’s XRP token on exchanges did not meet the criteria for investment contracts under the Howey Test. However, Judge Torres also ordered Ripple to pay a $125 million fine for institutional sales of XRP, which were deemed a violation of securities laws.
SEC’s Appeal
The SEC announced that it would appeal parts of the ruling, filing its pre-argument statement on October 17. The SEC outlined several issues it would contest, including Ripple’s programmatic sales of XRP on crypto trading platforms and personal sales by the company’s top executives.
Ripple’s Cross-Appeal
Ripple countered with a cross-appeal of its own, raising four essential points, including the definition of “investment contract” under the Securities Act of 1933. The company contests that an investment contract requires a formal agreement with post-sale obligations and a guarantee of profit for the buyer.
The cross-appeal also targeted the “fair notice” doctrine, claiming the SEC and other regulators failed to provide adequate guidance on the status of cryptocurrencies under federal law.
Implications of the Case
The case has significant implications for digital asset regulation and has been ongoing for over four years, with numerous delays causing frustration among the XRP community.