XRP remains a key focus as court documents reveal the SEC is currently exploring “various available options for further examination” following the recent verdict in the Ripple lawsuit.
After a court delivered a mixed outcome in the Ripple Labs lawsuit against the U.S. Securities and Exchange Commission (SEC), the agency filed new documents late Friday in its case against Terraform Labs and CEO Do Kwon, arguing that the Ripple decision was flawed and could be subject to appeal.
In recently submitted documents in the Terraform Labs case, the SEC seems to imply the possibility of appealing the Ripple rulings. In the Ripple case, a federal judge ruled that the company did not violate securities laws by offering its native token XRP to retail investors but did break the law concerning institutional investors.
We covered that in our article.
The SEC stated, “Contrary to Defendants’ claims, much of the Ripple ruling supports the SEC’s contentions in this case and dismisses the arguments raised here. However, regarding the Programmatic and other sales, the SEC respectfully asserts that Ripple contradicts and imposes unfounded requirements on Howey and its precedents.” The SEC further added, “Respectfully, those aspects of Ripple were erroneously decided, and this Court should not adhere to them. The SEC staff is evaluating various available avenues for further examination and intends to recommend seeking such review.”
These statements from the SEC come shortly after the agency’s Chair, Gary Gensler, expressed disappointment in the court’s determination that XRP is not a security when sold to retail investors. Gensler mentioned, “We are pleased that the court acknowledged […] that a token for institutional investors is a security […] disappointed in the other aspect about retail investors. We are still taking a look at that and considering it,” during an interview with Yahoo Finance on July 17.
On the same day, Gensler was also questioned at the National Press Club about whether the court rulings highlighted the urgent need for clear industry regulations on artificial intelligence. However, Gensler did not provide a specific answer.
The SEC argues that even if the “assortment of alleged factual distinctions” were substantial, the Ripple case supports the SEC’s stance. The SEC maintains that the institutional buyers in the Terraform case viewed the assets as an investment opportunity in Terraform’s efforts.
Terraform Labs and its CEO Do Kwon have been entangled in a legal dispute with the SEC since the beginning of this year, following the company’s collapse. The lawsuit has significant consequences, as Terra’s stablecoin UST lost its peg, leading to a $40 billion platform failure that affected both retail and institutional investors.
This situation presents an interesting development.
The last thing the XRP and cryptocurrency community needs is another prolonged legal case!
