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The US Securities and Exchange Commission (SEC) has made a significant move to appeal Judge Analisa Torres’ decision on Ripple in the ongoing case involving XRP. While Torres’ decision was seen as a partial victory for Ripple, the SEC’s appeal is likely to bring the case back into uncertainty and raise questions about the regulatory landscape for cryptocurrencies in the US.
Issues Raised in SEC’s Appeal
In a letter submitted to the Southern District of New York, the SEC requested pre-trial permission from Judge Analisa Torres. The letter focused on the allegation of whether certain aspects of Ripple’s XRP transactions constitute securities or sales under the Howey Test. The appeal revolves around the interpretation of Ripple’s “programmatic” offers and sales to XRP buyers, as well as the “other distributions” made in exchange for labor and services.
Additionally, the SEC also requested a review of a decision that is essentially an interim examination before the conclusion of a full trial. This approach aims to avoid prolonged litigation and multiple hearings, as well as address the potential impact on other pending cases that may depend on the resolution of such issues.
SEC’s Appeal and XRP
The SEC’s move to appeal Judge Torres’ partially favorable decision for Ripple signifies an increase in complexity in the ongoing and already complex case. The decision to file an appeal indicates the SEC’s unwillingness to accept the judge’s legal interpretation and its determination to defend XRP’s self-classification as a security. However, this action demonstrates that the SEC’s stance on crypto regulation remains unchanged and it is not willing to adapt to the rapidly changing digital asset landscape.
Experts emphasize that the appeals process could take months or even years, leading to further uncertainty surrounding the regulatory status of XRP. During this period, the cryptocurrency market and investors will remain uncertain about whether XRP will be classified as a security, a commodity, or something in between.
The resulting uncertainty has the potential to impact the market value of XRP and the rest of the cryptocurrency market. At its core, this impact stems from investors adopting a cautious approach until regulatory clarity is obtained.
