The United States Securities and Exchange Commission (SEC) filed a notice of appeal in the Ripple lawsuit on Oct. 2, 2024, seeking to overturn an earlier ruling from Judge Analisa Torres.
Legal experts anticipated the regulatory agency's appeal of the 2023 verdict set by Judge Torres, which established that secondary sales of Ripple's XRP did not constitute securities sales.
Torres ruled that XRP was not a security, in and of itself, due to the digital assets' failure to satisfy all the conditions listed in the SEC's Howey test to classify a financial asset as an investment contract.
SEC notice of appeal. Source: James K. Filan.
Because of this, secondary sales cannot be labeled as unregistered securities sales, Torres ruled. However, Torres also explained that early sales from the Ripple founders to institutional investors did constitute securities sales due to the manner in which the sales were conducted.
At the time, the ruling was hailed as a major victory for Ripple Labs and the broader cryptocurrency industry.
Related: SEC enforcement chief Grewal to step down
Securities and Exchange Commission enforcement chief steps down
On the same day that the SEC filed its notice of appeal in the Ripple lawsuit, the agency announced that its chief enforcement officer, Gubir Grewal, would step down on Oct. 11.
Grewal has long been criticized for bringing draconian enforcement actions against the crypto industry, having suggested more than 100 separate enforcement actions during his tenure.
Grewal has not yet been formally replaced by the government regulator, though Sanjay Wadhwa — deputy director of the SEC’s enforcement division — has been chosen as the interim chief enforcement director while a permanent replacement is found.
Bitwise files for XRP ETF trust
Interest in XRP may be growing within institutional circles. As Cointelegraph reported, Bitwise filed for an XRP ETF trust in the state of Delaware on Sept. 30. The filing, which appeared on the state’s Division of Corporations website, indicates the company is exploring an XRP trust.
However, the initial filing in Delaware is not an SEC filing and due to the recent legal appeal, SEC approval for the XRP trust may be delayed.
Magazine: Pro-XRP lawyer John Deaton ‘10x more into BTC, 4x more into ETH’: Hall of Flame