Ripple's legal representatives have responded to the United States Securities and Exchange Commission's appeal request, arguing that the exceptional circumstances required for an interlocutory appeal are absent. They urge the judge to deny the appeal request or stay it, as the SEC's grounds for appeal stem from dissatisfaction with a previous court decision that ruled XRP largely did not qualify as a security. The SEC's lawsuit, filed in December 2020, alleged that Ripple used its XRP token as an unregistered security to raise funds, leading to delistings of the XRP token on several exchanges.

Ripple's legal team filed their response with the U.S. District Court for the Southern District of New York, highlighting that the SEC's appeal request is driven by its dissatisfaction with the court's decision. They contend that the requisite "exceptional circumstances" needed for an interlocutory appeal are absent in this case. Ripple joins the opposition to the SEC's appeal request, emphasizing that the SEC has not met the standard for a stay. The response underscores that the SEC has targeted various crypto firms in 2023 over alleged securities violations, with a recent victory for asset manager Grayscale against the SEC leading to an appeal that ordered a review of its application for a spot Bitcoin exchange-traded fund.

Ripple's legal representatives argue that the SEC's requested civil penalty is disproportionate and unprecedented, exceeding the range based on Terraform's settlement. They point out that Terraform "fits the pattern" of the SEC's recent settlements, and that an appropriate civil penalty would be no more than $10 million. The SEC had requested that Ripple pay roughly $2 billion in disgorgement, prejudgment interest, and civil penalties. Ripple's legal team asserts that the SEC's request is more evidence of administrative overreach, as the agency acts as though it had prevailed entirely and proved reckless conduct.

The ongoing legal battle between the SEC and Ripple has significant implications for the cryptocurrency industry. A clear ruling will impact Ripple, XRP, and other companies dealing with token sales, influencing how they structure their offerings and potentially affecting the overall adoption of cryptocurrencies. The case has become one of the crypto industry's longest-running legal battles, leading to a significant legal precedent in July 2023. Ripple's CEO has expressed frustration with the SEC's actions, highlighting the legal process as a way to challenge the SEC's approach.

The court's final decision on penalties will be made by Judge Analisa Torres, with Ripple's legal team proposing a much lower penalty of $10 million. The SEC's reply brief is due in May, and the final decision is expected to have a significant impact on the cryptocurrency industry. The case highlights the need for regulatory clarity and the ongoing challenges faced by cryptocurrency companies in navigating the legal landscape.