SEC moves ahead with Ripple appeal in Gensler’s final days 

This is a segment from the Forward Guidance newsletter. To read full editions, subscribe.

The SEC has moved forward with an appeal in its case against Ripple. 

The securities regulator is seeking to reverse a 2023 ruling that determined retail sales of Ripple’s XRP token were not unregistered securities offerings. Federal Judge Analisa Torres said that blind/programmatic sales of XRP, which occur on exchanges, were not in violation of US securities laws. 

“The district court erred both factually and legally in concluding that defendants’ offers and sales of XRP to public buyers who purchased on crypto asset trading platforms,” the SEC wrote in its opening brief, filed late last night. 

Even if buyers didn’t know their XRP tokens were coming from third parties or Ripple itself, Ripple still led the public to have “reasonable expectations of profits” from the cryptocurrency, the SEC said. Ripple’s “public marketing campaign…specifically engaged ‘less sophisticated’ investors,” the regulator added. 

Ripple chief legal officer Stuart Alderoty dismissed the SEC’s claims, writing on X that the brief is nothing but “a rehash of already failed arguments.” 

Plus, Alderoty added, new leadership at the SEC is likely to “abandon” the case altogether.  

On this last point, I’m less certain that the SEC will drop this case after Trump takes office and Chair Gary Gensler departs, at least immediately. It’s possible, but any decisions Commissioners Hester Peirce and Mark Uyeda make in the short term (before three additional commissioners are appointed and confirmed) will face harsh legal scrutiny. 

We’re much more likely to see commission votes resume after there are at least three sitting commissioners.

Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.