The U.S. Securities and Exchange Commission (SEC) has officially appealed a recent court ruling regarding Ripple and its cryptocurrency, XRP. This legal move reignites the debate over whether XRP sales on exchanges should be classified as securities.
The SEC’s appeal was filed with the U.S. Court of Appeals for the Second Circuit and challenges key parts of a decision made by Judge Analisa Torres. In July 2023, the court ruled that XRP sales on digital trading platforms do not count as securities.
Source: X
However, it also stated that Ripple’s sales to institutional investors were unregistered securities. Importantly, the court found that personal sales of XRP by Ripple executives Brad Garlinghouse and Chris Larsen did not violate any laws.
Following the ruling, Ripple was ordered to pay $125 million in civil penalties and was prohibited from further violations of the Securities Act. Now, the SEC is pushing back, disputing the court’s findings on exchange sales, the personal sales by Garlinghouse and Larsen, and Ripple’s non-cash XRP distributions made for services.
Crypto advocates comment that they believe the SEC’s tactics won’t have much impact, especially with potential reforms aimed at increasing crypto adoption following Trump’s victory.
The outcome of this appeal could have major implications for how cryptocurrencies are regulated in the U.S. As the SEC seeks to clarify the legal status of XRP, the entire crypto industry will be watching closely to see how this pivotal case unfolds.
