- Outgoing SEC Chairman Gary Gensler files final appeal against Ripple XRP ruling before resignation.
- SEC challenges Judge Torres’ decision that $757 million in programmatic XRP sales were not securities.
- Appeal document argues retail investors were influenced by Ripple’s marketing regardless of purchase method.
- SEC maintains all XRP units are fungible, making seller identity irrelevant to securities classification.
- Decision on XRP’s security status moves to US Court of Appeals for the Second Circuit.
SEC’s Final Stand on Ripple Case
The Securities and Exchange Commission (SEC) has launched its final crypto enforcement action under Gary Gensler‘s leadership, filing an appeal that challenges the landmark Ripple XRP ruling. The 100-page document, submitted days before Gensler’s scheduled departure, contests Judge Analisa Torres‘ decision that exempted $757 million in programmatic XRP sales from securities registration requirements.
Legal Challenge to Torres’ Interpretation
The SEC’s appeal focuses on what they view as fundamental misinterpretations in the original ruling. The commission argues that the Howey Test – the Supreme Court’s framework for identifying securities – doesn’t require investors to know who sells them assets. This interpretation directly challenges Judge Torres’ distinction between programmatic and institutional sales of XRP.
The appeal emphasizes Ripple’s marketing activities, which the SEC claims created profit expectations among retail investors, regardless of how they acquired XRP. This position aligns with the SEC’s historical approach to cryptocurrency enforcement, where they’ve maintained a high success rate in litigation.
Implications for Cryptocurrency Markets
The original ruling sparked a 60% increase in XRP’s value and led to widespread speculation about cryptocurrency regulations. However, the SEC’s position contradicts claims that “no blockchain token is ever a security” or that the SEC lacks jurisdiction over crypto exchanges, as suggested by some industry figures.
Market statistics support the SEC’s concerns about cryptocurrency investments, with data showing that over 99% of coin offerings have lost nearly all value. This reality underscores the commission’s argument for maintaining investor protections in cryptocurrency markets.
The case’s resolution now rests with the US Court of Appeals for the Second Circuit, whose decision could reshape the regulatory landscape for thousands of existing cryptocurrencies and future digital asset offerings.
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