The appeal will be automatically dismissed if the SEC does not submit its principal brief by the deadline.
The U.S. Securities and Exchange Commission (SEC) has been directed by the U.S. Court of Appeal for the Second Circuit to submit its main appeal brief against Ripple Labs by January 15, 2025. This follows the agency’s request for an extension of the deadline till the specified date.
SEC to Submit its Brief by January 15
Defense attorney James K. Filan disclosed the SEC’s formal motion to postpone the filing after the agency first missed its deadline for submitting the appeal brief. The Court of Appeal’s ruling regarding the SEC’s request was shared by the former federal prosecutor on November 1.
According to the document in Filan’s post, the court granted the regulator’s motion, but it also stated that the appeal would be essentially rejected if the agency did not submit its brief by January 15. The court further declared that the filing deadline would not be altered by any subsequent requests for an extension or other relief.
Judge Analisa Torres’ historic 2023 decision that sales of Ripple’s XRP coin on exchanges did not satisfy the Howey Test’s requirements for investment contracts is the root of the legal battle. But the judge also ruled that Ripple had violated securities regulations by selling XRP to institutions, and as a result, Ripple was fined $125 million.
The SEC filed its pre-argument statement on October 17 after announcing that it would appeal certain aspects of the decision. The agency listed a number of issues in the letter that it will challenge, such as the programmatic sales of XRP on cryptocurrency trading platforms by Ripple and the direct sales made by Christian Larsen and Brad Garlinghouse, two of the payments company’s top executives.
Ripple Submits Cross-Appeal
In response to the SEC’s action, Ripple filed a cross-appeal of its own against particular provisions of Judge Torres’ ruling.
The appeal brought up four key issues, including the Securities Act of 1933’s definition of “investment contract,” which experts believe might reshape the regulation of digital assets. The business argues that such a contract, which doesn’t apply to their XRP transactions, necessitates a written agreement with post-sale duties and a guarantee of profit for the buyer.
Additionally, Ripple criticized the “fair notice” approach, arguing that the SEC and other authorities had not given sufficient guidance regarding the legal standing of cryptocurrencies under federal law. It maintained that it tried to alert XRP purchasers to this regulatory ambiguity. The XRP community has been frustrated by the case’s multiple delays throughout its more than four-year duration.
Conclusion
The SEC’s appeal against Ripple marks another chapter in this protracted legal battle, setting a January 15, 2025, deadline for the agency’s main appeal brief. This case has become a landmark for crypto regulation, as Ripple’s argument centers on whether XRP qualifies as an investment contract under the Securities Act of 1933. Ripple’s cross-appeal raises crucial issues, including the lack of regulatory clarity provided by the SEC.
This lack of clear guidance has fueled frustration within the XRP community, which has endured significant delays over four years. If the SEC misses this deadline, the appeal will be dismissed—a decision that could decisively impact the regulatory landscape for digital assets, either curbing or empowering future cryptocurrency sales practices.
Reece Conner
Reece Conner is a leading expert in the cryptocurrency industry, known for delivering cutting-edge insights and practical guidance to both newcomers and seasoned investors. With a background in finance and technology, Conner bridges the gap between complex blockchain concepts and real-world applications.