Ripple files Form C, appeals SEC ruling on institutional sale of XRP.
Ripple Labs recently filed a Form C with the US Circuit Court of Appeals for the Second Circuit challenging the ruling from the US Securities and Exchange Commission, the company confirmed.
Ripple's chief legal officer Stuart Alderotti confirmed X's filing on Oct. 25, adding, “The SEC cannot submit or request new evidence.” [Ripple] To produce more”
The filing follows an August ruling by the US District Court for the Southern District of New York that imposed a $125 million fine on Ripple for institutional XRP (XRP) sales, ruling that those sales were securities transactions.
Source: Stuart Aderotti
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Competing institutional sales decision
Ripple's appeal argues that the district court ruled that the institutional sales of XRP made directly to accredited investors were securities transactions.
The appeal specifically challenges the court's application of the Hawaii test, a legal standard used to determine whether a transaction qualifies as an investment contract.
The appeal expressly requests the court's application of the Hawaii test, the standard for determining whether a transaction qualifies as an investment contract.
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Legal strategy and appeal process
Ripple's Form C file lays out the legal grounds for the appeal, asking it to review the case.
De novo review allows the appellate court to re-examine the interpretation of the law made by the district court without delaying its earlier conclusion.
While Alderoty expressed optimism about the appeal in X's post, he said the SEC's strategy of “confusion for Ripple and the industry” is “just background noise right now.”
Form C filed by Ripple requesting the district court's de novo review.
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SEC filing on Ripple
Ripple's filing follows an Oct. 16 appeal from the SEC, which filed a district court's request for partial summary judgment in Ripple's favor.
The SEC's appeal, however, did not challenge the ruling that XRP is not a security for programmatic sales on digital asset exchanges. Instead, he wanted to see the court's application of securities law to institutional sales.
Judge Annalisa Torres of the US District Court for the Southern District of New York ruled in July 2023 in favor of Ripple Labs that XRP is not a security when it is sold programmatically on a digital asset exchange.
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