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    Ripple files Form C, appeals SEC ruling on XRP institutional sales

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    Ripple Labs has filed an appeal against a US SEC decision that led to a $125 million fine related to institutional sales of its XRP cryptocurrency. Ripple argues that its sale of XRP to accredited investors should not be treated as securities transactions. The company is questioning the application of the Howey test, a measure used to determine if a transaction is considered an investment contract. Ripple’s legal team says they are ready for a new review of the case without reference to the previous decision. The appeal follows a similar move by the SEC.

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    Ripple Labs is taking legal action against a recent decision from the US Securities and Exchange Commission (SEC). The company recently lodged its Form C in the US Court of Appeals for the Second Circut. Ripple’s top legal honcho, Stuart Alderoty, confirmed this move in a recent post and made it clear that the SEC can’t throw new evidence into the mix or ask Ripple for more.

    The legal action is a response to a hefty fine that Ripple had to pay back in August. A US District Court in New York slapped Ripple with a $125 million penalty related to institutional sales of Ripple’s digital currency, XRP.

    Ripple isn’t taking this lying down. The company believes the decision to fine them was wrong, arguing that its institutional sales of XRP to accredited investors shouldn’t count as securities transactions.

    They’re particularly questioning the court’s use of the Howey test. This is a legal benchmark used to figure out if a transaction counts as an investment contract. And Ripple doesn’t believe it was applied correctly in their case.

    The Form C that Ripple have lodged outlines their legal argument for the appeal. They’re hoping for a fresh review of the case. This means the appeals court could reconsider the legal conclusions drawn in the original court case, without referring to the previous decision.

    Sharing his thoughts on the appeal, Alderoty seemed hopeful, shrugging off the SEC’s tactics as “distraction and confusion”.

    Ripple’s legal move is a counter to an appeal lodged by the SEC on Oct. 16. The SEC raised questions about the court’s judgment which was partially in favor of Ripple. But they didn’t challenge the ruling that XRP isn’t a security for programmatic sales on digital asset exchanges. Instead, they asked for a review of how securities law was applied to institutional sales.

    Back in July 2023, Ripple Labs caught a break when Judge Analisa Torres ruled that XRP is not a security when sold programmatically on digital asset exchanges.

    Source: Cointelegraph

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