SEC Mulls Over Ripple Ruling
The U.S. Securities and Exchange Commission (SEC) has hinted at the possibility of appealing the July 13 ruling in its lawsuit against Ripple Labs. According to the SEC, the ruling goes against existing securities laws and principles, notably the Howey Test, which determines whether an investment contract classification is appropriate.
Judge’s Verdict Stirs Controversy
Judge Analisa Torres found that the direct sale of XRP, Ripple’s native token, to institutional investors violated SEC rules. However, she ruled it permissible for retail investors to buy the same token on exchanges. The SEC is disgruntled by the second part of the judge’s ruling, stating it “establishes an arbitrary differentiation between the anticipations of knowledgeable institutional and individual investors.”
Terraform Labs Leverages Ripple Case in New Motion
The SEC voiced its grievances in its response to a motion to dismiss filed by Terraform Labs and its founder, Do Kwon, in a lawsuit brought against them for their alleged involvement in a colossal crypto asset securities fraud. The defendants have cited the precedent set by the Ripple case to support their motion.
SEC’s Claims in Ripple Ruling
The SEC insists that most of the Ripple ruling supports its claims in the Terraform Labs case. Still, it disagrees with certain verdict aspects, claiming it introduced “baseless requirements” to the Howey Test and its related principles.
SEC Chair’s View on Ripple Verdict
SEC Chair, Gary Gensler, previously voiced his disappointment over the court’s decision to classify XRP differently for institutional and retail investors. Gensler stated that the Commission was “considering” what to do next, leading to speculation about the SEC’s next steps.
Implications for the Crypto Landscape
The SEC’s potential appeal has sparked interest in the crypto community, as it could have significant implications for the status and classification of digital assets in the United States. Investors and industry participants eagerly anticipate further updates on the SEC’s next course of action and its potential impact on the broader cryptocurrency landscape.