Despite an impending leadership change at the U.S. Securities and Exchange Commission (SEC), the regulator is continuing its enforcement efforts, including its appeal against Ripple Labs.
Ripple’s chief legal officer, Stuart Alderoty, confirmed that the SEC will proceed with filing a brief in its appeal of a judgment in favor of the blockchain firm.
The ongoing legal battle stems from a December 2020 lawsuit alleging Ripple used XRP as an unregistered security to raise funds. In August 2024, a federal court ruled partially in favor of Ripple, finding the company liable for $125 million but rejecting the SEC’s claim that XRP inherently qualifies as a security. Ripple’s appeal does not challenge this aspect of the decision.
Alderoty criticized the SEC’s persistence, calling it a “waste of time and taxpayer dollars.” Ripple CEO Brad Garlinghouse also suggested that new SEC leadership under President-elect Donald Trump may shift the agency’s approach to crypto regulation.
Trump vowed to remove current SEC Chair Gary Gensler, whose tenure has faced criticism from the crypto industry. Gensler is set to resign on Jan. 20, with Trump proposing former commissioner Paul Atkins as a successor, pending Senate approval.
Ripple’s involvement in the political landscape has been notable. The company donated $45 million to the pro-crypto Fairshake PAC during the 2024 election cycle, with an additional $25 million pledged for the 2026 midterms. Alderoty himself contributed over $300,000 to Trump-aligned fundraising efforts.
Specifically, Ripple argues that its XRP sales to institutions shouldn’t be treated as securities transactions, as this would require an “investment of money in a common enterprise with expectations of profit derived solely from the efforts” of Ripple.
Additionally, Ripple challenges the court’s decision on “fair notice,” claiming that the SEC’s inconsistent and ambiguous statements about federal securities law application left Ripple without adequate guidance.
For its part, the SEC’s appeal primarily focuses on claims that Ripple executives Brad Garlinghouse and Chris Larsen violated securities laws by selling XRP and aiding Ripple’s violations. The appeal seeks to review the court’s rulings on XRP sales on exchanges and personal sales by the executives.
Ripple’s clash with the SEC, which began in 2020, centers on the agency’s initial claims that Ripple raised $1.3 billion through unregistered securities sales of XRP. Although a New York court ruled last year that Ripple’s programmatic XRP sales did not violate securities law, it required Ripple to pay $125 million for direct institutional sales, a figure far lower than the SEC’s proposed $2 billion fine.
