CDS Crypto News SEC Likely to Appeal Ripple Case Ruling, Focusing on XRP Secondary Sales as Securities
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SEC Likely to Appeal Ripple Case Ruling, Focusing on XRP Secondary Sales as Securities

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Sec Likely To Appeal Ripple Case Ruling, Focusing On Xrp Secondary Sales As Securities

SEC Likely to Appeal Ripple Case Ruling, Focusing on XRP Secondary Sales as Securities

The U.S. Securities and Exchange Commission (SEC) is expected to challenge the recent court decision in its ongoing case against Ripple Labs, potentially setting the stage for a significant legal battle over the classification of XRP.

The anticipated appeal stems from a partial summary judgment issued by Judge Analisa Torres in 2023, which ruled in favor of Ripple on several key issues. However, the SEC is likely to focus its appeal on the classification of XRP’s secondary sales, arguing that these transactions should also be deemed unregistered securities.

Fox Business journalist Eleanor Terrett recently revealed that the SEC may seek to overturn the court’s ruling on programmatic sales, which the agency contends fall under the definition of investment contracts, despite the technological nuances or labels involved. “As court after court has stated, the securities laws apply when firms offer and sell investment contracts, regardless of the technology or labels that they use,” an SEC spokesperson asserted.

In addition to challenging the classification of secondary sales, the SEC’s appeal is also expected to address the significantly reduced fine that Ripple was ordered to pay. On August 7, 2024, Judge Torres imposed a $125 million penalty on Ripple Labs for selling XRP without proper registration—a stark contrast to the SEC’s original demand, which approached nearly $2 billion. Despite this, Ripple’s top executives, including CEO Brad Garlinghouse and Chief Legal Officer Stuart Alderoty, expressed relief at the court’s decision, viewing the reduced fine as a positive outcome.

Sec Likely To Appeal Ripple Case Ruling, Focusing On Xrp Secondary Sales As Securities

The partial summary judgment delivered in July 2023 has been a pivotal moment in the case, celebrated by Ripple but leaving unresolved questions that could have broader implications for the cryptocurrency industry. One key issue is whether a written contract is required under the Howey test to classify an asset as a security—a point Ripple’s defense has strongly emphasized. The SEC, however, is expected to challenge this interpretation in its appeal.

The outcome of this case could have far-reaching consequences for the regulation of digital assets in the United States. The SEC’s actions and the legal precedents established by this case may set new standards for how cryptocurrencies are regulated.

The developments have also influenced XRP’s market performance. Following the court’s ruling, XRP’s price surged by 27%, climbing from $0.5018 to $0.6373 in just over an hour. However, reports of the SEC’s potential appeal caused XRP’s price to drop by approximately 6%, from $0.6415 to $0.6008.

Sec Likely To Appeal Ripple Case Ruling, Focusing On Xrp Secondary Sales As Securities
Sec Likely To Appeal Ripple Case Ruling, Focusing On Xrp Secondary Sales As Securities

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