von • The U.S. Securities and Exchange Commission (SEC) has filed a motion requesting permission to appeal a federal court ruling claiming that secondary sales of Ripple’s XRP token are not securities.
• The SEC argued that there are still “substantial grounds for difference of opinion” regarding how securities laws apply to crypto, making frequent reference to a similar case involving Terraform Labs where the judge ruled differently.
• Judge Analisa Torres‘s rulings last month were contested by the agency: one that “Programmatic Sales” of XRP (ex. secondary market sales) did not satisfy Howey, and another that “Other Distributions” (ex. Payments for services) also failed to do so.
SEC Requests Permission To Appeal Ripple Ruling
The U.S. Securities and Exchange Commission (SEC) has filed a motion requesting permission to appeal a federal court ruling last month claiming that secondary sales of Ripple’s XRP token are not securities.
Substantial Grounds For Difference Of Opinion
The agency argued that there are still “substantial grounds for difference of opinion” regarding how securities laws apply to crypto, making frequent reference to a similar case involving Terraform Labs where the judge ruled differently.
Contested Rulings
The motion, filed on Friday, contested two of Judge Analisa Torres‘s rulings last month: one that “Programmatic Sales” of XRP (ex. secondary market sales) did not satisfy Howey, and another that “Other Distributions” (ex. Payments for services) also failed to do so.
Terraform Labs Case
Shortly after the Ripple ruling, Terraform Labs attempted to capitalize with a motion to dismiss a similar SEC case against the firm, alleging securities fraud for failing to register its now failed TerraUSD (UST) stablecoin. District Judge Jed Rakoff rejected the group’s reasoning, however, refusing to distinguish “instantaneous trades…from other forms of distribution or sale…based solely on temporal considerations“.
Conclusion
Overall, while it is unclear whether or not the SEC will be granted permission to appeal this decision in court – as it is ultimately up to Judge Torres – the agency’s request highlights an ongoing dispute between different courts about how cryptocurrency should be treated under current regulations when it comes down questionably-structured initial coin offerings (ICOs).
