SEC Challenges Court Ruling on Ripple Labs Crypto in Appeal

The US Securities and Exchange Commission will appeal a recent court decision concerning Ripple Labs, which marked a setback for the organization’s attempts to control cryptocurrency markets.

The SEC asked a federal appeals court review of US District Judge Analisa Torres’ July 13 decision, which found that the selling of Ripple’s XRP digital token on public exchanges complied with federal securities laws.

According to the SEC, an appeal might address legal matters if there was a good deal of room for disagreement.

In addition, it stated that the results of any appeals would have a significant impact on numerous other litigation as well as its capacity to enforce securities laws.

The SEC has long asserted that it has the authority to regulate digital assets such as cryptocurrencies since they are considered securities, just like stocks and bonds.

In December 2020, it filed a lawsuit against Ripple, Chief Executive Brad Garlinghouse, and Co-Founder and Chairman Chris Larsen, charging them with illegally selling XRP to raise more than $1.3 billion in an unregistered securities offering.

Read next: Meta’s Threads: Rapid User Engagement Decline After Explosive Launch

SEC Lawsuit Update: Ripple’s Complex Situation

According to Torres, when the XRP token was issued on public markets, Ripple did not break the law because buyers had no justifiable expectation of advantage based on Ripple’s efforts.

However, US District Judge Jed Rakoff, who sits on the same bench, made the opposite decision eighteen days later, concluding that Terraform Labs’ Terra USD token qualified as a security when traded on open markets.

Because Torres found that Ripple had infringed securities laws by offering XRP to institutional investors, her decision was not totally in Ripple’s favor.

The judge will have to choose whether to put a hold on the proceedings so that the SEC can appeal her decision.

Ripple and the attorneys who represent Ripple, Garlinghouse, and Larsen did not immediately respond to requests for comment. The largest bitcoin exchange in the world, Binance, is also being sued by the SEC.

Read next:Japan and U.S. Join Forces to Collaborate on Hypersonic Missile Interceptor Development

Source: www.reuters.com