SEC hints at potential appeal to XRP ruling from Ripple Labs lawsuit

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The U.S. Securities and Exchange Commission has suggested considering an appeal against a recent ruling on the Ripple Labs lawsuit where XRP was ruled as not a security when sold to retail investors. The SEC has stated this ruling falls against the fundamental securities laws principles, especially the “Howey Test” that decides which investment contracts are categorized as. Chair Gary Gensler also commented regarding the court ruling in a Yahoo Finance interview, expressing disappointment about the “retail investors” decision.

On July 21, while exchanging comments in another lawsuit against Terraform Labs, SEC referred and highlighted a host of issues it holds against this ruling and also noting, “Contrary to Defendants’ assertions, much of the Ripple ruling reinforces the SEC’s claims in this case and rejects arguments Defendants have raised here. With respect to the Programmatic and other sales, the SEC respectfully avers that Ripple conflicts with and adds baseless requirements to Howey and its progeny,”

Appearing at the National Press Club could be related to the same topic, where Gensler was found to be questioned about a potential need for regulations in the industry. Even if Gensler faced interest in this topic, he failed ready to provide a suitable response for the same.

SEC avers the decision based on the given clause the Howey test suffices and supersedes other laws with such opinion regarding Ripple ruling makes it subjective and the opposing side of the “policy implications behind a 1934 statute.” Furthermore, on its website, the SEC has expressed that Fed courts may require commonality, yet “it does not require a commonality in its analysis or view commonality as a distinct part of Howey.
Ripple trials resulting XRP exclusion mirrors the example for the emergence of necessary crypto regulations.

Robert Wilson author
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