On October 2, the U.S. Securities and Exchange Commission (SEC) filed a notice of appeal in the Ripple lawsuit, aiming to challenge a decision made by Judge Analisa Torres. This appeal focuses on the 2023 ruling that determined secondary transactions of Ripple’s XRP did not qualify as securities sales. However, there have been multiple speculations regarding what exactly is the SEC appealing.
Vincent Van Code, a software engineer and XRP enthusiast, recently tweeted that the SEC is only appealing the August 24 ruling regarding fines, not the security status of XRP, which he believes is a positive sign for the crypto community. He pointed out that this may be why Bitwise filed for an ETF.
However, former SEC lawyer Marc Fagel disputed Van Code’s statement, clarifying that the SEC is appealing the court’s ruling that programmatic sales of XRP were not considered securities sales. He explained that while penalties and disgorgement might be included in the appeal, the main focus is on the ruling about programmatic sales. Fagel said that the court distinguished between programmatic sales and institutional sales, which were deemed securities sales.
Marc wrote, “The district court held programmatic sales were not securities sales (as opposed to institutional sales, which were). The SEC is appealing the programmatic sales ruling (and possibly disgorgement & penalties as well, but that’s not the point of it).”
Despite ongoing legal battles, interest in XRP from institutional investors is rising. On September 30, Bitwise Asset Management submitted a request to establish an exchange-traded fund (ETF) for XRP in Delaware. However, this filing is not with the SEC, and the appeal could delay any potential approval for an XRP trust.
The SEC’s formal appeal has been sent to the U.S. District Court in New York, where it is directed against Ripple CEO Brad Garlinghouse and co-founder Chris Larsen. The appeal comes after the court’s decision on August 7, 2024, which the SEC is now contesting.
