by Jude Ayua

The US Securities and Exchange Commission (SEC) has filed a formal appeal of its ongoing lawsuit against Ripple Labs in the U.S. Court of Appeals for the Second Circuit. Filed late on Wednesday, 15 January 2025, the appeal contests the July 2023 court ruling that partially dismissed the SEC’s claims against Ripple.

The US SEC sued Ripple Labs in December 2020 claiming Ripple’s XRP token was a security requiring the SEC’s approval before its public sales. In July 2023, a court ruled that XRP is a security only when sold to institutional investors, dismissing the case against the SEC. Later in August 2024, a court decision ordered Ripple to pay $125 million to the SEC contrary to the $2 billion the SEC sought against Ripple.

Although the SEC initiated its appeal in mid-October 2024, the January 2025 filing formally presents the SEC’s arguments challenging the court’s position that Ripple’s sale of XRP on crypto exchanges did not meet the “investment contract.” The SEC also disputes the court’s exclusion of non-cash XRP distributions, such as employee compensation and business incentives, asserting that the exchange of XRP for labor and services satisfies the “investment of money” element of the Howey Test.

Read also: Ripple CLO Alderoty challenges the U.S SEC on digital assets regulations.

Ripple execs lash the SEC

Ripple’s top executives have expressed their disappointment and displeasure after the SEC’s formal filling of its appeal. Ripple Chief Legal Officer Stuart Alderoty wrote on X:

“On January 20, Gensler’s war on crypto ends at the SEC. We asked the SEC to agree to postpone the filing of their opening brief in their appeal of our victory and they refused. What a waste of time and taxpayer dollars! Nevertheless, we are confident in our position on appeal and look forward to working with new SEC leadership to resolve this matter.”

Ripple Chief Executive Officer Brad Garlinghouse also wrote in response to Alderoty: “Gensler, very much on brand – completely dismissive of the 2024 election and the American public – fully commits to his failed ‘regulation-by-enforcement agenda to the bitter, bitter end.”

Expectations ahead of Trump’s administration

Meanwhile, Ripple executives expressed optimism about the incoming Trump administration to favor the company and the larger crypto market. Alderoty wrote that: “…the SEC’s appeal brief is … likely to be abandoned by the next administration… A new era of pro-innovation regulation is coming, and Ripple is thriving.”

While it remains uncertain if the next SEC Chair will continue the Ripple case, Trump’s reported nomination of a pro-crypto former SEC Commissioner Paul Atkins as Chair inspires some hope.

Read also: XRP gains over 11% as Ripple unlocks 500 million XRP tokens.

The crypto industry’s contribution to support pro-crypto candidates during the 2024 US election also makes the industry expectant about a positive policy change. Ripple contributed $45 million to the Fairshake political action committee (PAC) that supported candidates during the election. Ripple also promised an additional $25 million donation to the PAC ahead of the 2026 midterms.

XRP’s price surge

Despite the ongoing legal battle, XRP has maintained an all-time-high since it crossed the $1 threshold in November 2024. On Wednesday the appeal was filed, XRP surged by approximately 18 percent from $2.6 to $3.1. While XRP’s price is edging towards $4, its market cap has reached $190.93B. Perhaps the continued trust in the token is coming from President-elect Trump’s pro-crypto stance.

Read also: U.S SEC’s XRP lawsuit against Ripple finally over.

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Jude Ayua is a policy analyst at CAB. A lawyer, Jude is an associate at Infusion Lawyers where he is a member of the Blockchain & Virtual Assets Group. He is also a member of the Policy & Regulations Committee of the Stakeholders in Blockchain Technology Association of Nigeria (SiBAN). Jude reports and writes on crypto policy and regulations. jude@infusionlawyers.com

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