On October 2, 2024, in New York, the U.S. Securities and Exchange Commission (SEC) filed a notice of appeal to overturn a ruling by Judge Analisa Torres in the Ripple lawsuit. The judge had previously determined that sales of XRP to retail investors do not constitute securities transactions, a significant win for Ripple Labs.
The SEC's appeal follows a mixed outcome from an August ruling, where the agency's allegations against Ripple for a $1.3 billion unregistered securities offering were partially upheld. While the SEC was ordered to pay Ripple a $125 million penalty for direct sales to institutional investors, valued at $728 million, the regulator had initially sought a $2 billion fine.
As a result of the SEC's announcement, XRP's value dropped approximately 9%, trading just above $0.54. Ripple's CEO Brad Garlinghouse expressed frustration over the SEC's ongoing legal efforts, arguing that the agency has already lost on critical issues and that XRP's classification as a non-security stands firm. He criticized the SEC for wasting taxpayer money on what he views as a futile appeal.
On the same day, the SEC announced that its enforcement director, Gurbir Grewal, will resign on October 11, following criticism of his aggressive stance towards the crypto industry.