Ripple to fight SEC’s appeal over XRP’s non-security status

Ripple Labs will fight the United States Securities and Exchange Commission’s appeal of the court ruling that determined retail XRP sales were not in violation of securities laws.

In an Oct. 3 X post, Ripple (XRP) CEO Brad Galinghouse vowed to fight the SEC as long as it takes to uphold XRP’s status as a non-security and defend against the regulator’s appeal. Calling the SEC’s appeal “misguided and infuriating,” the Ripple exec wrote:

“Somehow, they still haven’t gotten the message: they lost on everything that matters. Ripple, the crypto industry, and the rule of law have already prevailed.”

The SEC filed an appeal on Oct. 2 to counter a ruling by the Southern District Court of New York that concluded that XRP cannot be classified as a security.

Recall that on July 13, Judge Analisa Torres ruled that the sales of XRP to retail investors were not an illegal securities offering, and the altcoin itself did not qualify as a security under the Howey test.

However, it was stated that Ripple’s institutional offerings violated the same laws due to the manner in which the sales were conducted, leading the SEC to propose a $1.95 billion penalty against Ripple Labs.

Judge Torres reduced the penalty to $125 million while mandating that Ripple must formally register with the SEC if it wants to offer securities in the future. 

Subsequently, in a Sept. 4 filing, both parties agreed to a stay order, under which Ripple would deposit 111% of the $125 million fine into a secure account, pending the resolution of any appeal. This arrangement effectively postponed the payment and strongly hinted at the SEC’s intention to appeal the ruling.

Ripple’s chief legal officer, Stuart Aldertoy, said the commission’s decision to appeal was “not surprising” as he criticized the agency and its current chair, Gary Gensler, for engaging in what he described as “litigation warfare” against the crypto industry.

“This just prolongs what’s already a complete embarrassment for the agency,” Aldertoy wrote in an Oct. 3 X post, adding that the blockchain payments firm will opt for a cross-appeal if it deems fit.

Hodl Law founder Fred Rispoli speculated that the process could be lengthy, noting that a ruling from the Second Circuit appeals court is unlikely to come before January 2026 and, more realistically, around March or April 2026. 

Meanwhile, Gensler has recently come under fire from U.S. lawmakers for the SEC’s aggressive enforcement action strategy towards the crypto sector. During a congressional hearing, the SEC chair was criticized for forging terms like “crypto asset security” and the SEC’s unclear language regarding digital assets like Ethereum.

In related news, Ripple has continued to focus on its global expansion efforts despite the legal complexities, with the firm recently securing an in-principle approval in Dubai.