Judge Rejects SEC Appeal in Ripple Case, XRP Surges

Ripple Labs, the company behind the XRP cryptocurrency, has scored another legal victory in its ongoing battle with the US Securities and Exchange Commission (SEC). A federal judge has denied the SEC’s motion to appeal a previous ruling that found some of Ripple’s XRP sales were not securities transactions.

The SEC filed a lawsuit against Ripple in December 2020, alleging that the company and its executives had raised over $1.3 billion by selling XRP tokens without registering them as securities. The SEC claimed that XRP was an investment contract that gave buyers an expectation of profit from Ripple’s efforts.

However, in July 2023, US District Judge Analisa Torres ruled that some of Ripple’s XRP distributions did not qualify as securities transactions under the Howey test, a legal framework for determining whether an asset is a security. 

She found that some buyers of XRP did not have an expectation of profit derived from Ripple’s entrepreneurial or managerial efforts. The SEC quickly sought to appeal this part of Torres’ order, arguing that it set a dangerous precedent for applying securities laws to crypto assets. 

Ripple Scores Another Win in Its Fight Against the SEC

But on October 4, Torres rejected the SEC’s appeal bid, finding it did not meet the legal standard for an early appeal before trial. The rejection of the SEC’s motion to appeal is seen as a significant win for Ripple, which has been energetically fighting the lawsuit.

The company has maintained that XRP is a decentralized digital currency that is not subject to securities regulation. Ripple has also argued that the SEC’s lawsuit has harmed the XRP market and its investors.

The lawsuit is expected to go to trial in April 2024, unless the parties reach a settlement before then. The outcome of the case could have major implications for the crypto industry, as it could set a precedent for how other digital tokens are regulated by the SEC.

XRP, which is the sixth-largest cryptocurrency by market capitalization, has rallied after the latest court ruling. According to CoinGecko, XRP is up 4.8% over the last 24 hours, trading at $0.533961 as of press time.