Yigit Taha OZTURK 
The U.S. Securities and Exchange Commission (SEC) has appealed a New York District Court ruling that XRP sold to retail investors is not an unregistered security.
In its January 15 filing to the Second Circuit Appeals Court, the SEC requested the overturn of the decision and for XRP sales to retail investors to be classified as unregistered securities. The SEC also argued that XRP distributed as employee compensation and in business deals should be deemed securities.
Allegations Against Ripple
The SEC claimed that Ripple’s promotional efforts made XRP an investment contract, fulfilling the requirements of the Howey Test, which defines securities. However, in July 2023, Judge Analisa Torres ruled that XRP was a security when sold to institutions but not when sold to retail investors through exchanges, as these investors didn’t know the seller.
You Might Be Interested In: Elon Musk Shared, That Memecoin Flew: Up 500%!
Ripple CEO Brad Garlinghouse criticized the appeal, saying, “The SEC is doing the same thing over and over and expecting different results.” Ripple’s Chief Legal Officer Stuart Alderoty also dismissed the SEC’s arguments as “a rehash of already failed claims.”
XRP and Market Reaction
The appeals process could take months, with Ripple submitting counter-arguments and the court potentially hearing oral arguments. Ripple has also cross-appealed parts of the case it lost, including a $125 million civil penalty ruling.
Despite the SEC’s filing, XRP surged by 10% in the past 24 hours amid broader crypto market gains.
You can also freely share your thoughts and comments about the topic in the comment section. Additionally, don’t forget to follow us on our Telegram, YouTube, and Twitter channels for the latest news and updates.