US SEC Signals Appeal To Overturn Court Judgment In Ripple (XRP) Case

Key Points:

• The US SEC has signaled its intention to appeal the court’s ruling for dismissing the case against Ripple (XRP).
• The regulator argued that the court had failed to consider the evidence presented by the SEC and properly apply the law.
• SEC attorneys preview Ripple’s ability to appeal the case against Do Kwon and Terra.

According to Bloomberg, the US SEC has just announced that a federal judge erred in ruling against the institution in a landmark crypto case last week, signaling that it will appeal the decision.

The US Securities and Exchange Commission (SEC) filed a response to the court ruling in Terra Exchange LLC v. Ripple Labs Inc. on July 21, 2023.

In response to the court’s decision, the SEC argued that the court erred in deciding to dismiss the case. The agency argued that the court failed to consider the evidence presented by the SEC and failed to apply the law properly. The SEC also argued that the court failed to consider the potential harm to investors if Ripple Labs was allowed to continue operating without registering the XRP token as a security.

The SEC has been investigating Ripple Labs since late 2020, alleging that the company and its executives violated securities laws by selling unregistered securities.

However, on May 16, the community stirred up with US District Judge Analisa Torres siding with Ripple Labs that nearly half of its XRP sales did not violate investor protection laws. Torres’ ruling has given hope to other defendants fighting the SEC over the sale of cryptocurrencies, which the SEC says are often securities sold illegally.

SEC lawyers previewed an appeal that could potentially overturn portions of Ripple Labs last week in a separate enforcement lawsuit against TerraUSD and Luna creators Do Kwon and Terraform Labs.

Do Kwon, the jailed co-founder of crypto firm Terraform Labs, is one of the defendants trying to use Torres’ decision to defeat the SEC lawsuit. The agency charged Kwon with fraud and other law violations in a complaint filed in Manhattan federal court in February.

In its statement, the SEC wrote that the judge in Kwon’s case should not cite the Ripple case as a precedent. The SEC said Torres’ decision “adds baseless claims” to testing when an asset is a security. The agency plans to seek “further review,” which could mean an appeal.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.