Alexander Savenkov The U.S. Securities and Exchange Commission (SEC) has suggested that certain aspects of the Ripple judgement concerning XRP were “incorrectly determined.” The regulatory authority has petitioned the federal court to dismiss certain segments of the ruling, expressing that the “SEC staff are exploring potential routes for further examination and plan to propose that the SEC pursue such a review.”
SEC Challenges Ripple Verdict Concerning Retail Investors
In a recent submission related to its legal case against Terraform Labs and its co-founder, Do Kwon, the U.S. Securities and Exchange Commission (SEC) expressed disagreement with some determinations made in the SEC vs Ripple lawsuit pertaining to XRP.
While acknowledging that the Ripple judgement supports the SEC’s argument in terms of institutional investors, the securities watchdog highlighted: “Yet, concerning the programmatic and other sales, the SEC respectfully submits that Ripple contradicts and imposes unwarranted obligations on Howey and its descendants.” The regulator further stated:
With all due respect, some aspects of the Ripple decision were incorrectly determined, and this court should not accept them. SEC staff are considering potential pathways for further review and plan to recommend that the SEC pursue such a review.
The SEC’s submission was a reaction to an earlier motion this week by Terraform Labs’ and Kwon’s legal team seeking to dismiss the SEC’s lawsuit. In February, the SEC initiated a lawsuit against Terraform Labs and Kwon, alleging them of participating in a deceptive scheme and selling unregistered securities, leading to a loss of at least $40 billion in market value.
In their motion to dismiss the lawsuit, Terraform Labs’ attorneys referred to the Ripple ruling as justification, stating that the Ripple verdict “validates the legal inadequacy of the SEC’s contention” that specific tokens, including the unsuccessful stablecoin terrausd, were securities.
Following the Ripple verdict on XRP, SEC Chairman Gary Gensler expressed dissatisfaction with the judgement related to retail investors.
While the crypto community celebrated the Ripple-XRP decision, some expressed concerns. John Reed Stark, former SEC internet enforcement chief, and attorney Bryan Jacoutot suggest the decision rests on unstable foundations, cautioning that the judgement could be reversed.
Do you believe the Ripple decision concerning XRP will be reversed? Please share your thoughts in the comments section below.
Table Of Contents
Frequently Asked Questions (FAQs) about Ripple-XRP Ruling
What has the SEC said about the Ripple ruling on XRP?
The U.S. Securities and Exchange Commission (SEC) has indicated to a federal court that certain parts of the Ripple ruling related to XRP were “incorrectly decided”. The SEC is considering various avenues for further review of these aspects of the ruling.
What aspects of the Ripple ruling does the SEC disagree with?
While the SEC agrees with parts of the Ripple ruling that concern institutional investors, it objects to the rulings related to programmatic and other sales. The SEC argues that these parts of the Ripple ruling conflict with and impose baseless requirements on the Howey test and its progeny.
What lawsuit is the SEC currently involved in?
The SEC is involved in a lawsuit against Terraform Labs and its co-founder, Do Kwon. The SEC alleges that they were part of a fraudulent scheme and sold unregistered securities, which resulted in a market value loss of at least $40 billion.
How do the lawyers for Terraform Labs view the Ripple ruling?
The lawyers for Terraform Labs have referred to the Ripple ruling as a justification for their motion to dismiss the SEC’s lawsuit. They argue that the Ripple decision validates their argument against the SEC’s claim that certain tokens, including terrausd, were securities.
What does the SEC Chairman think about the Ripple ruling?
SEC Chairman Gary Gensler has expressed disappointment with the Ripple ruling, particularly with the aspects related to retail investors.
More about Ripple-XRP Ruling
- SEC’s statement on Ripple Ruling
- The Ripple-XRP case
- SEC vs Terraform Labs case
- Background on the Howey Test
- Comments from Terraform Labs’ lawyers
- Remarks from SEC Chairman Gary Gensler on the Ripple ruling
6 comments
That’s why we stand with Ripple, these guys are always under fire. XRP to the moon!
So they still can’t decide if XRP is a security or not. It’s been years, come on!
man… just when we thought the XRP case was closed. The market’s gonna be unpredictable now.
SEC’s stuck on the Howey Test, huh? It’s high time we got a new standard for crypto!
It’s always the same with these regulators… All they do is create uncertainty in the market.
Wow, didn’t expect SEC to react so strongly. They might turn things around for XRP!