Ripple Labs has announced its intention to challenge the U.S. Securities and Exchange Commission’s (SEC) appeal regarding a court ruling that found retail sales of XRP did not violate securities laws.
In a post on X (formerly Twitter) on October 3, Ripple CEO Brad Garlinghouse expressed his commitment to defending XRP’s classification as a non-security. He criticized the SEC’s appeal as “misguided and infuriating,” stating, “Somehow, they still haven’t gotten the message: they lost on everything that matters. Ripple, the crypto industry, and the rule of law have already prevailed.”
The SEC filed its appeal on October 2, aiming to overturn a ruling by the Southern District Court of New York, which determined that XRP could not be classified as a security. This ruling followed Judge Analisa Torres’ decision on July 13, which found that XRP sales to retail investors did not constitute an illegal securities offering and did not meet the criteria of the Howey test.
However, the court did find that Ripple’s institutional sales had violated securities laws, resulting in the SEC proposing a penalty of $1.95 billion against the company. Judge Torres later reduced this penalty to $125 million and required Ripple to register with the SEC if it wished to offer securities in the future.
On September 4, Ripple and the SEC reached an agreement for a stay order, allowing Ripple to deposit 111% of the $125 million fine into a secure account while the appeal is resolved. This arrangement effectively postpones the payment and signals the SEC’s intent to appeal.
Ripple’s Chief Legal Officer, Stuart Alderoty, remarked that the SEC’s decision to appeal was “not surprising” and criticized the agency, particularly its chair, Gary Gensler, for what he termed “litigation warfare” against the crypto industry. “This just prolongs what’s already a complete embarrassment for the agency,” Alderoty noted in his October 3 post, adding that Ripple may consider a cross-appeal if necessary.
Legal expert Fred Rispoli suggested that the appeals process could take considerable time, predicting that a ruling from the Second Circuit appeals court may not arrive until January 2026, and more realistically, around March or April 2026.
Meanwhile, Gensler has faced increasing scrutiny from U.S. lawmakers over the SEC’s aggressive enforcement strategies towards the crypto sector. During a recent congressional hearing, he was criticized for vague terminology like “crypto asset security” and the SEC’s unclear stance on digital assets such as Ethereum.
In the midst of these legal challenges, Ripple continues to pursue global expansion, recently securing in-principle approval in Dubai.
