SEC to appeal Ripple XRP decision

The judge’s decision, which found that XRP by itself doesn’t comprise a security and that sales of XRP were only securities sales when made to sophisticated investors, seemed to be an opening for the rest of the industry

The US Securities and Exchange Commission said it will appeal a judge’s controversial ruling on Ripple because of its centralized structure, the case rests on one of the key debates for the crypto sector: whether crypto currencies should be regulated as securities or as commodities.

The judge’s decision, which found that XRP by itself doesn’t comprise a security and that sales of XRP were only securities sales when made to sophisticated investors, seemed to be an opening for the rest of the industry. The Securities and Exchange Commission presently has active lawsuits against leading exchanges like Coinbase and Binance for offering unregistered securities. Torres’s ruling, though, suggested that such programmatic sales would be outside the jurisdiction of the Securities and Exchange Commission.

The mid-July ruling was split, with Torres leaving some questions for a later jury trial, including whether two Ripple executives were liable for the illegal offering and sale of securities. Earlier, on Wednesday, Torres announced her intent to hold the trial in the second quarter of 2024. The fact that the case is not yet settled complicates the appeals process, prompting the Securities and Exchange Commission’s motion to seek leave to file an interlocutory appeal.

In its letter filed on Wednesday, the agency said that it would seek to stay the court’s proceedings, including the scheduling order, during its motion and potential appeal. The Securities and Exchange Commission contended that the order’s ruling was of consequence to other pending litigation, including against Coinbase, Binance, and Huobi founder Justin Sun. The SEC also noted that a different SDNY judge had showed “substantial ground for difference of opinion” on the question of programmatic sales in a separate case involving Terraform Labs, the developer of the failed TerraUSD stablecoin.