The United States Securities and Exchange Commission (SEC) has officially filed an appeal in the Ripple lawsuit, aiming to overturn a recent ruling made by Judge Analisa Torres.
This legal battle began back in December 2020 when the SEC first sued Ripple Labs and its founders.
Background on the Ripple case
On October 2, the SEC submitted a notice of appeal regarding the 2023 ruling that determined secondary sales of Ripple’s XRP do not count as securities sales.
Legal experts had expected this move after Judge Torres ruled that XRP itself is not a security because it does not meet all the criteria outlined in the SEC’s Howey test, which is used to classify financial assets as investment contracts.
#XRPCommunity #SECGov v. #Ripple #XRP BREAKING: The @SECGov has filed a Notice of Appeal of Judge Torres’s Ruling. pic.twitter.com/j8bLIZQ5LT
— James K. Filan 🇺🇸🇮🇪 (@FilanLaw) October 2, 2024
Because of this ruling, Torres stated that secondary sales of XRP cannot be classified as unregistered securities sales.
However, she did find that early sales made by Ripple founders to institutional investors were indeed considered securities sales due to how they were conducted.
This decision was viewed as a significant win for Ripple Labs and the cryptocurrency industry as a whole.
Changes at the SEC and growing interest in XRP
On the same day the SEC announced its appeal, it also revealed that Gubir Grewal, the chief enforcement officer, would resign on October 11.
Grewal faced criticism for his strict enforcement actions against the crypto sector and had suggested over 100 enforcement actions during his time in office.
While the SEC has not yet appointed a permanent replacement for Grewal, Sanjay Wadhwa, who is currently the deputy director of the enforcement division, will serve as interim chief enforcement director until a new leader is chosen.
XRP ETF is coming?
In another development, interest in XRP appears to be rising among institutional investors. Bitwise filed for an XRP ETF trust in Delaware on September 30.
This filing was made public on the state’s Division of Corporations website and suggests that Bitwise is looking into creating an XRP ETF.
It is important to note that this initial filing does not constitute an official submission to the SEC, and with the ongoing legal appeal, approval for the XRP trust may face delays.
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