SEC Pushes Forward with Ripple Appeal as XRP Reclaims $3.1

• The SEC appeals the July 2023 ruling that XRP programmatic sales aren’t securities.
• Ripple dismisses the SEC’s case, predicting less impact under new Trump leadership.
• XRP gains 31.8% in a week and over 9% in 24 hours despite a legal battle, boosting market confidence.

The U.S. Securities and Exchange Commission (SEC) has filed its formal appeal against Ripple Labs, refusing to pause proceedings despite the upcoming leadership change on January 20. The appeal challenges the July 2023 ruling that declared programmatic XRP sales did not constitute securities offerings.

Filed Wednesday, the SEC’s appeal centers on whether Ripple’s XRP sales to retail investors qualify as unregistered securities under federal law. The regulator argues that Ripple’s promotional activities created profit expectations among investors. The SEC argues that this makes XRP an investment contract under the Howey Test.

The SEC’s brief takes issue with the district court’s finding that crypto exchange sales fell outside securities laws. The regulator contends that investor expectations depend on the issuer’s actions rather than the seller’s identity. The appeal also disputes the exclusion of non-cash XRP distributions, like employee compensation, arguing that labor and services received for XRP meet the Howey Test’s “investment of money” requirement.

Related: https://cryptotale.org/a-recap-on-what-happened-in-the-crypto-market-over-2024/

Meanwhile, XRP’s price shows strong momentum, climbing 9.2% in the last 24 hours and 31.8% over the past week. The token’s yearly performance stands at an impressive 439.5% gain, suggesting market confidence despite ongoing legal challenges.

Ripple’s Chief Legal Officer Stuart Alderoty dismissed the SEC’s latest filing as a “rehash of failed arguments.” He predicts the case will lose steam under the incoming Trump administration, which has expressed more favorable views toward cryptocurrency.

The case began in late 2020 and received a partial resolution in July 2023 when Judge Analisa Torres ruled that XRP “is not necessarily a security on its face,” except for institutional sales. This ruling marked a major victory for Ripple, though the SEC’s appeal now threatens to extend the legal battle.

The appeal’s outcome could influence cryptocurrency regulation in the United States. A SEC victory might empower further enforcement actions against other digital assets, while a defeat could limit the agency’s regulatory reach.

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