SEC leaves door open for appeal in Ripple case

Quick Take

  • The Securities and Exchange Commission left the door open for an appeal of a decision around XRP that partly went in Ripple’s favor. 

Following a partial defeat in its longstanding case against Ripple Labs over the company's sale of its native token XRP, a spokesperson for the Securities and Exchange Commission left the door open for a possible appeal of the decision.

In a statement, an agency spokesperson said that the markets regulator will "continue to review the decision" and touted other parts of the judge's ruling that went in the agency's favor. 

"We are pleased that the court found that XRP tokens were offered and sold by Ripple as investment contracts in violation of the securities laws in certain circumstances," the spokesperson said in a statement provided to The Block. "The court agreed with the SEC that the Howey test governs the securities analysis of crypto transactions and rejected Ripple’s made-up test as to what constitutes an investment contract, instead emphasizing that Howey and subsequent cases have held that a variety of tangible and intangible assets can serve as the subject of an investment contract."

The spokesperson also noted that the federal judge in the case, Judge Analisa Torres of the Southern District of New York, ruled that ignorance of securities law was not a sufficient defense. 

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Independent experts expect an appeal from the SEC, if not both sides, as Torres found that over $700 million worth of XRP sales were unlawful and ordered a trial to determine personal liability for Ripple CEO Brad Garlinghouse and Executive Chairman Chris Larsen.


© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

Colin oversees and contributes policy, regulatory, political, and legal coverage for The Block. Before joining The Block he covered congressional economic policy, including fintech legislation, for Bloomberg Industry Group and Politico, with additional stints at the Washington Examiner and American Banker. Colin is an alumnus of Columbia University's Graduate School of Journalism and Sewanee: The University of the South. 


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