SEC hints at potential appeal to XRP ruling from Ripple Labs lawsuit
The U.S. Securities and Exchange Commission has suggested that it may appeal a recent ruling on the Ripple Labs lawsuit, which deemed XRP to not be a security when sold to retail investors.
The SEC argues that the ruling goes against “fundamental securities laws principles” such as the Howey Test, which determines what falls under the category of an investment contract or not.
Do we really want a judge to ask herself: Does my strict application of the Howey test in this case result in an outcome in 2023 that comports with the policy implications behind a 1934 statute? https://t.co/acMNRc00B6
The SEC’s latest comments on the Ripple Labs lawsuit were made in a separate lawsuit against Terraform Labs and its founder Do Kwon, over allegedly “orchestrating a multi-billion dollar crypto asset securities fraud.”
As per the SEC’s July 21 response to a motion to dismiss from Terraform Labs — in which the potentially precedent-setting Ripple Labs ruling was referenced by the defendants — the SEC highlighted a host of issues it holds against the court’s recent decision on XRP.
“Contrary to Defendants’ assertions, much of the Ripple ruling supports the SEC’s claims in this case and rejects arguments Defendants have raised here. However, with respect to the Programmatic and other sales, the SEC respectfully avers that Ripple conflicts with and adds baseless requirements to Howey and its progeny,” the SEC stated, adding that:
Related: XRP price searches for a fresh bullish catalyst to trigger a move above $1
The SEC’s statements come just a few days after SEC Chair Gary Gensler expressed his disappointment over the court deeming XRP to not be a security when sold to retail investors.
“We are pleased that the court addressed
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