SEC Seeks to Overturn Court’s Ruling on XRP as Token Hits $3

by

In this development, XRP, the cryptocurrency in question, has exceeded $3 for the first time since 2018, igniting enthusiasm among its backers. Contrariwise, the Securities and Exchange Commission (SEC) is contesting a 2023 court ruling from the New York District Court, which deemed that when XRP was sold to retail investors, it did not constitute an unregistered security.

SEC Seeks to Overturn Court’s Ruling on XRP

The Securities and Exchange Commission (SEC) has submitted an appeal in the Second Circuit Court of Appeals with the intention of reversing a decision made by Judge Analisa Torres in July 2023. In her verdict, the judge determined that transactions involving XRP among retail investors were not categorized as securities, whereas institutional sales of XRP were deemed as such. The SEC argues that this differentiation is erroneous and requires reevaluation.

The regulatory body believes the judge misunderstood the legal implications, claiming that the sale of XRP to regular investors was essentially an unlicensed securities transaction. Additionally, the Securities and Exchange Commission suggests that XRP tokens given out as employee rewards and in business transactions should be categorized as securities.

Ripple Responds: A “Rehash” of Failed Arguments

As a crypto investor, I’ve found myself closely following the ongoing legal battle between Ripple and the Securities and Exchange Commission (SEC). Recently, Ripple’s lawyers have taken a firm stance against the SEC for their decision to pursue an appeal, labeling it as a repetition of previously dismissed arguments. Stuart Alderoty, Ripple’s Chief Legal Officer, vocalized this on social media, stating that the commission’s filing was essentially a reiteration of past claims, which he had already indicated were lost battles. Moreover, Brad Garlinghouse, the CEO of the company, has suggested that this appeal may be dropped once the next administration takes office.

As a crypto investor, I’m hopeful about Ripple’s situation, given their conviction that the current sentiment isn’t likely to significantly impact the course of their legal battle. The upcoming political shift under President Donald Trump could potentially bring a more accommodating stance towards cryptocurrency regulation, which might even pause ongoing cases like Ripple’s.

The Howey Test and Ripple’s Promotional Efforts

In the document they submitted, the Securities and Exchange Commission (SEC) emphasized once more that Ripple’s marketing efforts for XRP qualified as an investment contract, following the Howey test – a benchmark used to decide whether a financial asset is considered a security. Essentially, according to the SEC, individuals who purchased XRP from exchanges believed they would make a profit from their purchase, largely due to Ripple’s involvement.

On the other hand, Ripple contends that the Securities and Exchange Commission (SEC) did not provide enough proof demonstrating the real involvement of retail investors in the promotional activities of Ripple or any pledges about such promotion.

Market Reactions and XRP Price Surge

For the first time since 2018, the market value of XRP has surpassed $3, signaling growing investor confidence. This confidence stems from speculation that the SEC’s ongoing efforts may be met with a more favorable response from the new administration, potentially leading to a shift in the SEC’s stance towards XRP and consequently driving up its price.

As a researcher examining the market trends of Ripple, I’ve noticed several factors contributing to its rising price. One such factor is the widespread optimism surrounding Ripple’s extensive business operations, which often involves the sealing of new deals and the increasing adoption of its blockchain technology within the financial sector. More recently, the company’s foray into DeFi (Decentralized Finance) and cross-border payment solutions has significantly boosted the practicality and allure of the Ripple token.

Ripple’s Cross-Appeal and Potential Outcomes

As an analyst, I’m reporting that Ripple has filed an appeal against another judgment where Judge Torres imposed a $125 million civil penalty for areas they contested. In the course of this legal battle, we will submit briefs in response to the SEC’s appeal. A decision could be made within several months. Before reaching a conclusion, oral arguments may take place at the appellate court.

As a crypto investor, I’ve been closely following the ongoing legal tussle between the SEC and Ripple. The outcome of this case is uncertain, but its implications could be significant as it might shape the regulatory landscape for digital assets within the United States. In essence, we’re all watching to see how this battle unfolds, as it may pave the way for future regulations in our crypto investment sphere.

The ongoing legal case surrounding digital assets, particularly Ripple, has sparked intense discussions across various sectors about the appropriate regulation of cryptocurrencies within the United States. As more cryptocurrencies and blockchain technology become mainstream, lawyers are closely following this case because a favorable decision for Ripple could set a precedent that contradicts broader SEC regulations on digital assets. With appeals ongoing, both the cryptocurrency industry and regulators are bracing themselves for a potential ruling that could significantly influence how U.S. laws handle cryptocurrencies.

Read More

2025-01-17 22:16