Ripple has filed a Form C as part of its ongoing legal battle with the U.S. Securities and Exchange Commission (SEC).
Ripple Challenges Howey Test Ruling in Ongoing SEC Appeal
The filing outlines Ripple’s grounds for appealing a previous decision by the Southern District of New York challenging the court’s application of the Howey test to institutional sales of XRP. Howey Test and Reconsideration of Legal Dispute Ripple is requesting the appellate court to conduct a “de novo” review, which would require a fresh review of how the law was applied in the original decision.
The company argues that the district court incorrectly applied the Howey test, a legal standard used to determine whether a transaction qualifies as an investment contract and therefore a security.
Ripple specifically disputes that its direct sales of XRP to institutional investors are classified as securities transactions.
Additionally, Ripple claims it failed to provide fair notice regarding the applicability of securities laws. The company says the SEC’s guidance is inconsistent and vague, making it impossible for Ripple to comply with the regulations.
Ripple is also asking the appeals court to reassess the key components required for a transaction to qualify as an investment contract and to reconsider the scope of the SEC’s injunction against the company. Ripple’s Chief Legal Officer Comments on the Appeals Process Ripple Chief Legal Officer Stuart Alderoty emphasized that the appeals court will review the existing legal record without new evidence from the SEC.
“The Court of Appeals is reviewing the record that has already been produced… and we have a great record,” Alderoty said in a statement on X. “The SEC cannot present new evidence or require us to produce more. All the drama that we experienced in litigation will not happen.”
Alderoty also emphasized that XRP has been cleared as a non-security asset in certain contexts, a key element that has not been disputed by the SEC at this stage of the appeal.
*This is not investment advice.