Gary Gensler Challenges Ripple Ruling in Final SEC Filing

As his term concludes, outgoing SEC Chairman Gary Gensler has filed an appeal against the Ripple XRP ruling, arguing that the earlier decision by Judge Analisa Torres misinterpreted securities law.

This move, likely Gensler’s last major action as chairman, revisits the controversial July 2024 ruling that Ripple’s programmatic XRP sales to retail investors were not securities offerings.

The SEC’s appeal, submitted to the Second Circuit, contends that Ripple misled retail investors into believing XRP’s value was tied to Ripple’s efforts, regardless of how the tokens were purchased. Gensler’s team also argues that the Supreme Court’s Howey Test, which defines securities, doesn’t hinge on whether investors know the seller’s identity. Additionally, the appeal emphasizes that XRP’s fungibility means its classification as a security applies uniformly across transactions.

The Ripple ruling had significant ripple effects, sparking a 60% surge in XRP’s price and fueling perceptions that the SEC’s regulatory authority over cryptocurrencies was weakening. Critics of Gensler used the decision to amplify calls for his resignation, while social media campaigns like #FireGaryGensler further eroded his standing.

Gensler’s resignation takes effect as Donald Trump prepares to assume office, leaving the SEC under new leadership. The outcome of the Ripple appeal now rests with the U.S. Court of Appeals for the Second Circuit, a decision that could reshape the regulatory landscape for XRP and countless other cryptocurrencies. As Gensler exits, this appeal serves as a final chapter in his contentious relationship with the crypto industry.