XRP, Title Or Currency? The SEC Resumes Its Offensive Against Ripple

The Securities and Exchange Commission (SEC) recently filed an appeal against the July 2023 ruling regarding Ripple and its token XRP. This ruling concluded that programmatic sales of XRP through crypto exchanges did not constitute securities transactions. The SEC argues that all XRP sales, whether institutional or retail, should be considered as securities under the Howey test.

The SEC appeals the ruling on Ripple: The XRP sales at stake

In its appeal, the SEC claims that Ripple’s promotion of XRP created an expectation of profit among crypto investors. The agency argues that Ripple’s promotional efforts, through social media and the press, influenced both institutional and retail investors to buy XRP in hopes of making future profits. The SEC also challenges the district court’s reasoning that retail buyers did not have a reasonable expectation of profit due to the anonymous purchasing of XRP through exchanges.

Ripple, for its part, maintains that XRP is a digital currency and not a security. The crypto company asserts that XRP sales do not meet the criteria for an investment contract and should therefore not be regulated as securities. Stuart Alderoty, the legal counsel for Ripple, referred to the SEC’s appeal as a “repetition of already failed arguments” and believes that the appeal will lose momentum with Gary Gensler’s departure from the SEC.

Will Trump’s arrival save the crypto company?

The outcome of this appeal could have significant repercussions for the crypto industry. A SEC victory could encourage the agency to pursue similar cases, while a defeat could limit its authority in enforcing securities laws. However, with the arrival of Trump’s pro-crypto administration, investors hope that this case could be definitively settled, with a symbolic victory for Ripple.

The SEC’s appeal against Ripple thus raises crucial questions about crypto regulation. As the legal battle continues, the industry eagerly awaits a resolution that could define the future of digital asset regulation in the United States.