In a pivotal legal development, a federal judge recently dismissed the SEC’s appeal in a case against Ripple Labs, marking a significant setback for the regulatory body in its quest to regulate the crypto market. This decision reinforces a July ruling that deemed Ripple’s XRP token sales compliant with securities laws, challenging the SEC’s stance on crypto regulation. This legal battle highlights the ongoing debate over cryptocurrency’s place within federal securities laws, setting a precedent for future regulatory endeavors in the crypto space.
Federal judge on Tuesday, October 03, 2023 rejected the US Securities and Exchange Commission’s (SEC) appeal against a recent decision involving Ripple Labs. Observers consider this a major defeat for the regulator in its cryptocurrency market oversight efforts.
In a July 13 decision, US District Judge Analisa Torres in Manhattan ruled that Ripple’s sale of XRP tokens on exchanges complied with federal securities laws because buyers had no conscious expectation of profit from Ripple.
The SEC sought to appeal Judge Torres’ findings on XRP’s “programmatic” sale and its “other distribution” as a payment method, emphasizing the appeal’s importance to numerous lawsuits. However, the judge found no “substantial basis for disagreement” regarding his findings and disagreed that an appeal would make the case easier to resolve.
Torres said his ruling did not contradict a July 31 decision by US District Judge Jed Rakoff in Manhattan that said the SEC had a “plausible claim” that Terraform Labs’ Terra USD tokens were securities when sold on exchanges. Rakoff considered Terraform’s dismissal motion for the SEC’s case, necessitating acceptance of all rulings favoring the regulator. The court has scheduled the next Ripple case hearing for April 23, 2024.
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