• The SEC has filed a motion to appeal a federal court ruling that Ripple’s XRP token is not considered a security.
• The agency argued that there are still “substantial grounds for difference of opinion” regarding how securities laws apply to crypto.
• This motion references another similar case involving Terraform Labs where the judge ruled differently on the issue.
SEC Requests Permission To Appeal Ripple Ruling
The U.S. Securities and Exchange Commission (SEC) has filed a motion requesting permission to appeal a federal court ruling last month claiming that secondary sales of Ripple’s XRP token are not securities. The agency argued that there are still “substantial grounds for difference of opinion” regarding how securities laws apply to crypto, making frequent reference to a similar case involving Terraform Labs where the judge ruled differently.
Ripple Case Not Over?
The motion, filed on Friday, contested two of Judge Analisa Torres‘s rulings last month: one that “Programmatic Sales” of XRP (ex. secondary market sales) did not satisfy Howey, and another that “Other Distributions” (ex. Payments for services) also failed to do so. “There are significant grounds for difference of opinion on the correctness of both rulings,” wrote the agency.
Terraform Labs Case
Shortly after the Ripple ruling, Terraform Labs attempted to capitalize with a motion to dismiss a similar SEC case against the firm, alleging securities fraud for failing to register its now failed TerraUSD (UST) stablecoin. District Judge Jed Rakoff rejected the group’s reasoning, however, refusing to distinguish “institutional investors from retail investors or otherwise limit application of Howey in this digital asset context.”
SEC’s Arguments Against Ripple Ruling
The SEC noted in its filing that there have been diverging decisions within district courts when it comes to applying securities law in cryptocurrency cases — such as whether Howey applies — and stated this was reason enough for an appeal due to the fact it could lead “to inconsistent outcomes in other cases.”
It is unclear at this time if Judge Torres will grant permission for an appeal; however should she rule against it then her decision would stand as final confirmation that XRP does not constitute a security under current US regulations — potentially dealing yet another blow against any further regulatory efforts by the SEC towards cryptocurrencies more broadly speaking.