In a significant move that could reshape the regulatory landscape for XRP and blockchain payments company Ripple, the U.S. Securities and Exchange Commission (SEC) announced on Wednesday that it is appealing a court ruling limiting its authority over crypto markets. .
THE appeal targets a July 2023 ruling by U.S. District Judge Analisa Torres, who ruled that the XRP token, sold by Ripple Labs on public exchanges, does not qualify as a security under existing laws.
SEC Court of Appeals Ruling on XRP
The implications of this decision are substantial. Judge Torres stated that the approximately $757 million in XRP sales on public exchanges were not under the jurisdiction of the SEC, thus exempting these transactions from the investor protection laws that the agency enforces.
If the 2nd U.S. Circuit Court of Appeals upholds this interpretation, it could harm the SEC’s ability to regulate other cryptocurrency exchanges, like Coinbase, and challenge the agency’s oversight of newer financial products that don’t fit traditional definitions. .
However, the decision was not entirely in favor of Ripple. Torres also ruled that approximately $728 million in XRP sales to institutional investors should be classified as securities, requiring compliance with relevant laws.
Ripple CEO rejects SEC appeal
The SEC had originally requested a hefty $2 billion fine against Ripple, but Torres ended up imposing a $125 million fine, which is currently suspended pending the outcome of the appeal.
Ripple CEO Brad Garlinghouse express his frustration with the SEC’s decision to appeal, calling it “misguided” and “infuriating.” He emphasized that despite ongoing legal challenges, XRP’s current legal status as a non-security is established:
If Gensler and the SEC were rational, they would have dropped this case a long time ago. It certainly did not protect investors and instead damaged the SEC’s credibility and reputation. While we will fight in court for as long as necessary, let us be clear: XRP’s status as a non-security is the law of the land today.
At the time of writing, XRP is trading at $0.5390, down 10% after the SEC appealed the judge’s ruling on Wednesday.
Featured image of DALL-E, chart from TradingView.com
