The US Securities and Exchange Commission Chairman, Gary Gensler has remained tight-lipped regarding whether the agency will appeal the recent court ruling that XRP is not a security or the timeline for such a decision.
Gary Gensler Comments on the Ruling
According to a recent report, Gensler provided a glimpse into the SEC’s reaction to the court ruling in the Ripple case during his interaction with reporters after a recent Senate Appropriations Committee appearance.
He highlighted that the agency found merit in parts of the ruling concerning institutional investors. On the other hand, Gensler expressed reservations regarding the application of the Howey analysis to retail sales.
While he acknowledged the court’s stance on this aspect, he made it clear that the SEC was still examining the implications of the ruling on retail transactions.
The Court’s Ruling
The SEC vs. Ripple Labs case revolves around the question of whether the XRP cryptocurrency, created and distributed by Ripple Labs, qualifies as a security under federal securities laws.
The SEC has alleged that Ripple Labs conducted an unregistered securities offering by selling XRP tokens to investors, thereby violating securities regulations. Ripple Labs has vehemently denied these allegations and argued that XRP should be classified as a digital currency.
Last week’s ruling saw a surprising outcome, as the presiding judge Analisa Torress granted Ripple partial victory, stating that XRP is not an investment contract. The ruling has left investors and the crypto community eagerly awaiting the SEC’s next move as it could potentially impact how the SEC approaches similar cases involving other cryptocurrencies in the future.
What An Appeal Entails
Both the SEC and Ripple Labs have reasons to consider appealing the ruling, and the process could involve several steps and considerations. If the SEC decides to appeal the portion of the ruling that went against the commission, the process may take time due to legal analysis and internal considerations.
On the other hand, Ripple may also consider appealing parts of the ruling that deemed certain XRP sales to institutional investors as illegal securities offerings while finding other XRP sales permissible.
If any side decides to file an appeal, the matter will be transferred to the Second Circuit Court of Appeals, where a panel of justices will examine the legal arguments and the lower court’s ruling. This appellate process could take many months, significantly delaying the case’s settlement.