Ripple’s Form C highlights four critical issues that the company believes the court should reconsider.
Ripple Form C. Source:X
Ripple is questioning whether an investment contract must be legally binding.
While this would not absolve the company of the $125 million judgment, attorney Jeremy Hogan argues that Ripple is pushing for this clarification primarily to benefit the broader crypto ecosystem, as winning this issue “would cripple the SEC enforcement regime.”
The company is also contesting the classification of institutional sales of XRP as securities.
By appealing this verdict, Ripple seeks to re-argue the Howey test’s fundamental principles, a decades-old legal framework for determining what constitutes security.
As part of its appeal, Ripple has revived the fair notice defense, which allows companies to argue that they did not know their actions violated the law. By invoking this defense, Ripple is attempting to shift the burden of proof back onto the SEC.
Lastly, Ripple is challenging the validity of the injunction, citing the SEC’s alleged failure to provide sufficient regulatory clarity. The company argues that the agency’s vague instructions to “follow the law” are insufficient, rendering the injunction invalid.
Top Ripple executives, including CEO Brad Garlinghouse and Chief Legal Officer Stuart Alderoty, have expressed confidence in their chances of winning the appeal.
Garlinghouse has stated he is confident he will “win the appeal, which would put a dagger in Gary Gensler’s whole agenda around crypto regulation.”
Alderoty, in turn, reminded the crypto community that the SEC has not disputed the court’s ruling affirming XRP’s non-security status. He noted that the toughest challenge is behind them, with the SEC facing slim odds in the Second Circuit.
“The Second Circuit, traditionally, is not a fan of the SEC. They’re not a fan of regulatory overreach. And statistically, if you lose, your chances of getting the Second Circuit to reverse is around 10% or less,” Alderoty noted.
In contrast, the SEC’s request for an extension to file its principal brief has raised questions about the agency’s confidence in its case.
Prashant Jha is a seasoned crypto journalist based in Delhi, India, with a Bachelor’s Degree in Computer Science Engineering. Passionate about the evolving world of blockchain and cryptocurrencies, he has been a dedicated voice in the industry since 2018. Prashant’s expertise lies in regulatory reporting, where he unravels complex legal and financial developments with clarity and precision. Before joining CCN in 2024, he honed his craft at Cointelegraph, establishing himself as a trusted name in crypto journalism.
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