Popular payment infrastructure provider, Ripple Labs has filed a Form C in the United States Court of Appeals for the Second Circuit. According to the Chief Legal Officer of Ripple, Stuart Alderoty the firm is challenging the recent ruling of the United States Securities and Exchange Commission.
The chief legal officer of the firm made the disclosure on Friday via a post on X (formerly Twitter). In the post, Alderoty described the movements of the SEC as an attempt to distract Ripple and the broader digital assets sector.
He added that the SEC cannot submit fresh evidence or ask the firm to provide more. As per the revelation, Ripple is not contended with the $125 million fine imposed on the firm.
Insight Into the Legal Tussle
Recall that last August, the US District Court for the Southern District of New York imposed a $125 million fine on Ripple for the institutional sales of XRP tokens. In the ruling, the court stated that the institutional sales were securities transactions.
Meanwhile, in the new filing, Ripple disputes the ruling of the district court stating that it didn’t carry out any securities transactions. The appeal contested the decision of the court to apply the Howey test to prove that the firm violated securities law.
It is worth mentioning that the Howey test is a legal measurement that rules if a transaction is an investment contract. With the form C filing, Ripple is laying the ground for appeal by requesting a de novo review of the case.
A de novo revenue permits the appeals court to re-evaluate the legal interpretations passed by the district court without deviating from its ruling.
Like Ripple, the United States Securities and Exchange Commission has Laos appeal the partial summary of the ruling by the district court that is in favor of Ripple. In a filing that surfaced in October, the regulator requested a review of the court’s interpretation of securities laws in international sales.
However, the SEC refrained from arguing that XRP isn’t a security for programmatic sales on virtual asset exchanges. In July 2023, Judge Analisa Torres of the US District Court for the Southern District of New York ruled that the XRP isn’t a security when sold programmatically on exchanges.Â
Ripple Co-Founder Drumming Support for Kamala Harris
Meanwhile, the appeal surfaced shortly after Ripple Co-founder, Chris Larsen donated XRP worth $10 million to Future Forward USA, a super PAC backing Democratic Vice President Kamala Harris in the 2024 U.S presidential election.
Larsen confirmed the donation via a post via his official X account suggesting that Democratic lawmakers could take a new approach to emerging innovations under Kamala Harris.
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