SEC hints at possible appeal

Former SEC Director Called Vitalik Buterin Before His Speech

According to court documents, the SEC said it is currently “examining the various options available for further review” of a ruling that XRP is not a security.

The US Securities and Exchange Commission has suggested that it may appeal a recent decision in a Ripple Labs lawsuit that XRP is not a security when sold to retail investors.

The SEC says the decision goes against “fundamental principles of securities law” such as the Howey test, which determines what qualifies as an investment contract and what does not.

The latest SEC comments on the Ripple Labs lawsuit were made as part of a separate lawsuit against Terraform Labs and its founder, Do Kwon, about “organizing a multibillion-dollar cryptocurrency securities fraud.”

According to the July 21 SEC response to the Terraform Labs motion, in which the defendants cited Ripple Labs’ potentially precedent-setting decision, the SEC has highlighted many issues it has against the recent XRP court ruling.

“Contrary to Defendants’ assertions, the majority of Ripple’s ruling supports the SEC’s claims in this case and rejects the arguments put forward by Defendants here. However, with regard to programmable and other sales, the SEC respectfully notes that Ripple is in conflict with Howey and is making unreasonable demands on Howey,” the SEC said, adding that:

“With all due respect, these parts of the Ripple case were misjudged and should not be followed by this court. The SEC staff is considering the various options available for further review and intends to recommend that the SEC pursue such review.”

The SEC statements came just days after SEC Chairman Gary Gensler expressed disappointment that the court ruled that XRP was not a security when sold to retail investors.

“We are pleased that the court ruled […]that the token is a security for institutional investors […], is disappointed with another aspect concerning retail investors. We are still looking at this and evaluating the next steps,” Gensler said in an interview with Yahoo Finance on July 17.

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