XRP's Uncertain Future: Ripple Ongoing Battle With SEC Appeal

Ripple has taken a firm stance against the U.S. Securities and Exchange Commission (SEC) in their efforts to challenge a court decision that ruled in favor of Ripple. The ruling, issued in July, stated that XRP was not classified as a security for most of its public sales. This contradicted the SEC’s allegations.

In a court filing submitted on Sept. 1, the lawyers representing Ripple argued that the SEC had no valid basis for appealing the judge’s decision. They emphasized the absence of exceptional circumstances necessitating an interlocutory appeal. Furthermore, they urged the judge to dismiss the SEC’s request to halt proceedings pending further review.

In December 2020, the Securities and Exchange Commission (SEC) initiated legal action against Ripple and its CEO, Brad Garlinghouse, as well as co-founder Chris Larsen. The lawsuit accused them of unlawfully offering securities without proper registration through token sales of XRP.

As a result of this litigation, several cryptocurrency exchanges decided to remove or temporarily halt the trading of XRP, ultimately impacting its market value and overall market capitalization.

Judge Analisa Torres delivered a significant victory to Ripple and the cryptocurrency industry at large. In July, she ruled that XRP did not meet the criteria set by the SEC for securities in most sales targeted towards retail investors.

It is important to note that the judge made a clear distinction between direct sales of XRP to individuals and those made to institutional investors. The SEC contested the ruling in August, highlighting significant differences of opinion on the legal matters at stake.

To support their argument, they referred to a similar case involving Terraform Labs and its founder, Do Kwon. Interestingly, Judge Jed Rakoff rejected Torres’s approach and concluded that the Terra USD token could potentially be categorized as a security when sold to retail investors.

Ripple Vision For The Future Of Cryptocurrency

Ripple asserts that XRP should not be considered a security. Instead, it should be seen as a digital asset that facilitates cross-border payments and drives innovation in the cryptocurrency domain. Additionally, the company has criticized the SEC for its lack of clarity and consistency in regulating cryptocurrencies, causing harm to countless XRP holders who were not involved in the lawsuit.

In the US crypto community, it can be disheartening to witness how many individuals are compelled to utilize the legal process to demonstrate that the SEC is operating beyond reasonable bounds and consistently erring when it comes to both factual accuracy and adherence to the law.

These sentiments were expressed by Garlinghouse in an Aug. 30 X post. In 2023, the Securities and Exchange Commission (SEC) intensified its efforts against several cryptocurrency companies due to suspected securities violations.

Notable firms such as Binance and Coinbase faced scrutiny. However, on Aug. 29, a significant development favored Grayscale, an asset manager specializing in crypto products.

They successfully filed an appeal, requesting a court review of their application for a Bitcoin exchange-traded fund (ETF). In the meantime, the legal dispute between Ripple and the SEC remains unresolved. Judge Torres has suggested a jury trial in the second quarter of 2024.

“The author’s views are for reference only and shall not constitute investment advice. Please ensure you fully understand and assess the products and associated risks before purchasing.”