Ripple leaves no chance to counter-appeal against SEC ruling

Silicon Valley crypto payments company Ripple has formally filed a countersuit with the SEC to ensure nothing is overlooked.
Ripple filed its counterclaim notice yesterday in the U.S. District Court in New York, seeking review of the final judgment rendered by that court on August 7, 2024.
Notably, prominent defense attorney James K. Filan shared this development in an X-post yesterday.
The company’s counter-notice comes a week after the SEC formally appealed the Ripple ruling.
Ripple Judgment Brief Summary
Recall that the SEC and Ripple achieved partial victories in both the brief and final judgment. The court ruled that Ripple had violated securities laws through its institutional sales of XRP, but declared that the company’s programmatic sales and other distributions of tokens were not investment contracts.
As a result, the court ordered Ripple to pay a $125 million fine for violating the institutional sales law. It also placed an injunction on future institutional sales by Ripple, requiring the company to seek permission from the SEC before conducting those transactions.
Ripple’s counterclaim notice shows that the company is unhappy with the court’s decision regarding its institutional sales related to XRP. As a result, the company sought to overturn the decision in the U.S. Court of Appeals.
Both Ripple and the SEC are seeking appellate review of Judge Analisa Torres’ decision, and the two appeals are expected to be consolidated into one case in the Second Circuit.
Ripple hopes to leave no regrets
Although Ripple has yet to file its formal counterclaim brief, the company’s chief legal officer, Stuart Alderoty, provided a clue as to what crypto enthusiasts should expect.
According to him, the SEC appealed Judge Analisa Torres' decision because it lost on all key aspects of the case. However, he said Ripple is cross-appealing to ensure “no regrets are left.”
The company’s appeal will focus on the argument that an investment contract cannot exist without a contractual agreement that clearly sets out the rights and obligations of both parties.
It’s worth noting that this argument concerns Ripple’s institutional sales of XRP, which Judge Analisa Torres declared to be securities.
SEC's possible appeal brief
In addition, Aldrotti also indicated what the SEC's appeal brief will look like. Ripple’s chief legal officer said the SEC has confirmed that it will not appeal Judge Torres’ ruling that XRP is not a security.
Furthermore, Aldroti added that the agency apologized for suggesting in another case that tokens themselves could be securities, thus confirming that position is the law.
While the SEC likely won’t appeal XRP’s non-security status, Aldrotti believes the regulator could challenge Ripple’s decisions on programmatic XRP and other distributions to employees and developers.
It should be remembered that Judge Torres ruled that these transactions were not investment contracts. Last year, the SEC sought an immediate appeal to challenge those decisions, but a judge rejected their request.
While Aldrotti expects the SEC to appeal the decisions, he predicts the regulator will lose again. In conclusion, Ripple’s chief legal officer said the company looks forward to the appeals court ending the SEC’s misguided attacks on the crypto industry.
Ripple CEO’s response
Reacting to this development, Ripple CEO Brad Garlinghouse expressed his displeasure with the SEC and its Chairman Gary Gensler, saying that if they cared about the crypto industry, the commission should not appeal.
However, he noted that the SEC is only concerned with creating confusion rather than providing clear guidance. Following Ripple’s countersuit, Garlinghouse said the company wants to seal the SEC’s fate and end its agenda of regulation through enforcement.