Ripple may file a cross-appeal to challenge SEC’s legal move

It remains unclear whether the SEC will challenge the court’s ruling on the secondary market sales of XRP tokens or dispute the imposed fine.

Key Takeaways

• Ripple faces a $125 million fine, significantly less than the SEC’s initial $2 billion claim.
• Ripple may challenge the classification of XRP sales or the fine amount in a potential cross-appeal.

Ripple is considering filing a cross-appeal in response to the SEC’s appeal against the court’s judgment on August 7, which ordered Ripple to pay $125 million to resolve charges over the institutional sales of XRP tokens, said Ripple Chief Legal Officer Stuart Alderoty.

The penalty, although more than Ripple’s suggested $10 million, is significantly lower than the nearly $2 billion initially demanded by the SEC, which included extensive disgorgement and prejudgment interest.

The court also ruled that XRP tokens sold on secondary markets do not qualify as securities.

As of now, it is unclear whether the SEC will contest Ripple’s fine imposition or the court’s ruling that secondary market sales of XRP tokens are non-securities.

With the SEC’s decision to proceed with its appeal, Ripple is evaluating a countermove in the ongoing SEC litigation over XRP. This could involve Ripple appealing Judge Torres’ ruling regarding the sale of XRP to institutions as investment contracts or challenging the $125 million fine.

Both appeals would be consolidated into a single case before the Court of Appeals. Ripple has a 14-day window starting tomorrow to file its cross-appeal.

Alderoty said he was disappointed by the SEC’s decision, but not surprised. He criticized the SEC’s litigation strategy as prolonging “embarrassment.”

“The Court already rejected the SEC’s suggestion that Ripple acted recklessly, and there were no allegations of fraud and, of course, there were no victims or losses,” Alderoty stated.

“Instead of faithfully applying the law, this agency, under this Chair, continues to engage in litigation warfare against the industry. We are evaluating whether to file a cross-appeal. Either way, the SEC’s lawsuit has been irrational and misguided from the start, and we’re ready to prove that yet again in the appellate court,” he added.

The appeal was filed just an hour after Gurbir Grewal, who directs the SEC’s enforcement actions, announced his resignation. It’s unclear whether Grewal’s departure was connected to the case’s handling.

According to attorney Fred Rispoli, the Second Circuit will not rule until January 2026, probably no earlier than March or April.