The US Securities and Exchange Commission (SEC) has opted to appeal a crucial court ruling that categorizes XRP tokens as non-security. This appeal had a direct impact on the price of XRP tokens.
The decision from the Court of Appeals can reshape the regulatory framework for crypto assets.
Ripple CEO Criticizes SEC’s Appeal
In July 2023, US District Judge Analisa Torres determined that XRP, a token distributed by Ripple Labs, does not meet the security criteria defined by the SEC’s Howey test. This judgment directly influenced Ripple Labs, exempting $757 million in transactions from strict securities regulations.
However, the SEC is challenging this ruling at the 2nd US Circuit Court of Appeals in Manhattan. The agency seeks to reverse the decision, which could profoundly affect the regulation and trading of cryptocurrencies.
Due to this development, the price of the XRP token tumbled. In the past 24 hours, XRP has declined by 11.22%, currently trading at $0.5339.
Read more: Ripple (XRP) Price Prediction 2024/2025/2030
Judge Torres’ ruling also partially favored the SEC, indicating that $728 million worth of XRP sales to institutional investors should comply with securities laws. Following this, Ripple faced a $125 million fine in August 2024, although this penalty is halted pending the appeal’s outcome.
Ripple CEO Brad Garlinghouse has publicly criticized the SEC’s decision to appeal. He argued that the initial ruling should have resolved the issue, accusing the SEC of wastefully spending taxpayer money in its continued litigation against Ripple.
“While we’ll fight in court for as long as we need, let’s be clear: XRP’s status as a non-security is the law of the land today – and that does not change even in the face of this misguided – and infuriating – appeal,” Garlinghouse stated.
This ongoing legal battle transcends Ripple or XRP. It is emblematic of a broader debate over the classification of crypto and their regulatory status. The 2nd Circuit’s future decision could impact Ripple’s operations and potentially set a legal precedent for the treatment of other cryptocurrencies under US law.
In a separate development, the SEC announced the upcoming departure of Gurbir S. Grewal, the Director of the Division of Enforcement, effective October 11, 2024. Sanjay Wadhwa will serve as Acting Director, with Sam Waldon as Acting Deputy Director.
During Grewal’s leadership, the SEC initiated over 100 enforcement actions in the crypto sector, targeting major players such as Binance and Coinbase. Hence, SEC Chair Gary Gensler lauded Grewal’s contributions and emphasized his leadership in enforcing securities laws.
Read more: Who Is Gary Gensler? Everything To Know About the SEC Chairman
“Every day, [Grewal] has thought about how to best protect investors and help ensure market participants comply with our time-tested securities laws. He has led a Division that has acted without fear or favor, following the facts and the law wherever they may lead,” Gensler said.
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