SEC Might Appeal Judge’s Ruling in XRP Lawsuit

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Based on the recent reports, the US Securities and Exchange Commission (SEC) could file an appeal against its latest judgment in the Ripple Labs case, thereby concluding that XRP does not constitute security when offered to individual investors.

SEC to Appeal Judge’s Decision

According to the SEC, the verdict violates “fundamental securities laws principles” that involve the Howey Test, which evaluates the question of whether an investment agreement applies.

The agency noted: “Respectfully, those portions of Ripple were wrongly decided, and this Court should not follow them. SEC staff is considering the various available avenues for further review and intends to recommend that the SEC seek such review.”

Numerous Objections 

The regulatory agency’s final responses on the Ripple Labs controversy came in an unrelated procedure involving Terraform Labs and its creator Do Kwon, during which the parties in dispute highlighted the potential precedent-setting Ripple Labs verdict. 

According to the SEC’s July 21 response, the SEC raised a number of objections with the court’s recent XRP judgment.

SEC vs. Ripple Labs’ Lawsuit

Notably, the root of the SEC vs. Ripple Labs’ lawsuit is centered around the issue regarding if Ripple Labs’ XRP cryptocurrency counts as a security under federal securities regulations. The agency has charged them with offering unregistered securities to investors by selling XRP tokens.

XRP is not a Security

However, Ripple Labs has maintained that XRP needs to be categorized as a digital currency. In last week’s verdict, the judge in charge, Analisa Torress, gave Ripple partial victory, noting that XRP is not an investment contract.

The decision has speculators and the crypto industry bracing for the next step, since it may influence the way the regulatory authority conducts similar investigations concerning other cryptocurrencies’ future. 

The Chairman of the SEC, Gary Gensler, has lately been reported to be secretive regarding if the agency is going to appeal the present court verdict that XRP is not a security, in addition to the timing for that decision.

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