Key Insights:

• Ripple and SEC prepare for a lengthy appeals process, with major filings due in January 2025.
• Ripple’s cross-appeal targets institutional XRP sales, aiming to redefine security classifications.
• Ripple’s new RLUSD stablecoin launches under New York’s strict regulatory framework for global payments.

Ripple Labs Chief Legal Officer (CLO) Stuart Alderoty has outlined the next steps in the ongoing legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC). The case, initially filed in 2020, centers on whether XRP, Ripple’s native cryptocurrency, qualifies as a security, and whether the company violated U.S. securities laws by not registering its sales. As the lawsuit advances into the appeals stage, both parties anticipate a drawn-out process, which could extend into 2026.

Key Upcoming Filings in the Appeals Process

Alderoty shared detailed insights on the steps ahead during Ripple’s annual Swell conference. He explained that the SEC must file its Form C by October 16, 2024, to clarify the specific issues it plans to challenge in the appeal. Form C is a procedural document that indicates the focus of the appeal, laying the groundwork for future arguments.

Following the SEC’s submission, Ripple will have two weeks to file its own Form C, in which the company will cross-appeal parts of the original ruling. Ripple plans to contest the decision that its institutional sales of XRP were classified as unregistered securities transactions, while still accepting the judgment that retail sales were not. 

After both Form Cs are submitted, the parties will set a schedule for submitting legal briefs. The SEC’s first brief is expected to be filed by mid-January 2025, with Ripple responding afterward.

The legal back-and-forth is expected to continue throughout much of 2025, with a series of filings and responses from both sides. This lengthy process reflects the complexity and importance of the case, which has implications for Ripple and the broader cryptocurrency industry.

Ripple Confident in Stronger Legal Ground

Despite the prolonged timeline, Ripple remains optimistic about its legal standing. Alderoty expressed confidence that Ripple is better positioned in the U.S. Court of Appeals for the Second Circuit than it was in the initial trial court, the Southern District of New York. He emphasized that most appeals in the Second Circuit result in the lower court’s decision being upheld.

“We think this appeal will blow up in the SEC’s face,” Alderoty remarked during his presentation. He pointed out that the appeal could potentially provide broader legal clarification that impacts the wider cryptocurrency industry. A ruling in Ripple’s favor could set a precedent, which may provide more clarity on how cryptocurrencies are regulated in the U.S.

Ripple’s Cross-Appeal Targets Institutional Sales Ruling

Ripple’s cross-appeal will focus specifically on the portion of the ruling related to institutional sales of XRP. While Judge Analisa Torres had previously ruled that retail sales of XRP did not qualify as unregistered securities, she found that Ripple’s institutional sales violated securities laws. Ripple plans to challenge this finding, arguing that these sales did not involve “investment contracts” — a key element needed to classify them as securities under U.S. law.

Alderoty indicated that the company seeks to establish a legal precedent that more clearly defines the distinction between different types of cryptocurrency sales. Ripple contends that institutional sales of XRP did not involve specific rights and obligations, which are typically present in investment contracts. If the Second Circuit Court agrees, it could reshape how certain cryptocurrency transactions are regulated in the U.S.

Ripple Continues Global Expansion Amid Legal Battle

Even as the company deals with ongoing legal challenges, Ripple continues to expand its operations globally. At the Swell conference, Ripple also announced the upcoming launch of its new stablecoin, RLUSD. This dollar-backed stablecoin is designed to facilitate faster and more cost-effective cross-border payments. 

Notably, RLUSD will be issued under New York’s stringent regulatory framework, which may help Ripple navigate regulatory challenges that have affected other stablecoins in the market.