In a significant move that could reshape the regulatory landscape for XRP and blockchain payments company Ripple, the US Securities and Exchange Commission (SEC) announced on Wednesday that it is appealing a court ruling limiting its authority over cryptocurrency markets.
the attractiveness It targets the July 2023 decision by U.S. District Judge Analisa Torres, who decided that the XRP token, which Ripple Labs sells on public exchanges, does not qualify as a security under existing laws.
SEC Appeals Court Ruling on XRP
The implications of this ruling are significant. Judge Torres stated that approximately $757 million of XRP sales on public exchanges do not fall under the SEC’s jurisdiction, thus exempting these transactions from the agency’s investor protection laws.
If the U.S. 2nd Circuit Court of Appeals upholds this interpretation, it could hinder the SEC’s ability to regulate other cryptocurrency exchanges, such as Coinbase, and challenge the agency’s oversight of newer financial products that don’t fit traditional definitions.
However, the ruling was not entirely in Ripple’s favor. Torres also ruled that approximately $728 million in XRP sales to institutional investors must be classified as securities, requiring compliance with relevant laws.
Ripple CEO slams SEC appeal
The SEC had originally sought to impose a massive $2 billion fine on Ripple, but Torres ultimately imposed a $125 million fine, which is currently on hold pending the outcome of the appeal.
Ripple CEO Brad Garlinghouse Express He also expressed frustration with the SEC’s decision to appeal, calling it “misguided” and “infuriating.” He stressed that despite ongoing legal challenges, XRP’s current legal status has been determined to be unsafe:
If Gensler and the SEC had been rational, they would have moved on from this issue long ago. It certainly did not protect investors, but rather damaged the credibility and reputation of the SEC. Although we will fight in court as much as we need, let’s be clear: XRP’s status as insecure is the law today.
At the time of writing, XRP is trading at $0.5390, down 10% after the SEC appealed the judge’s ruling on Wednesday.
Featured image of DALL-E, chart from TradingView.com