SEC Seeks Federal Judge’s Disregard in XRP Lawsuit, Suggesting Appeal: Report

According to reports, the U.S. Securities and Exchange Commission (SEC) has asked a federal judge to disregard the recent precedent-setting court decision in favor of Ripple Labs and XRP.

According to a recent story by Bloomberg, The SEC claims that the decision, which determined that Ripple Lab’s automated, open-market sales of XRP do not qualify as securities transactions, violates current securities regulations.

The SEC’s action suggests the possibility that the organization will appeal the judgment.

The decision also stated that while XRP sales to institutional investors are illegal under securities regulations, XRP sales to individual investors directly through cryptocurrency exchanges are not. The SEC is requesting that the court disregard the “artificial distinction” that the decision has allegedly made between the expectations of ordinary and institutional investors.

 According to the SEC, The Supreme Court developed the Howey Test decades ago to decide whether an asset qualifies as a security, and the decision wrongly modifies it.

Brad Garlinghouse, CEO of Ripple Labs, stated last week that the decision had brought the regulatory body under control because its enforcement activities have inhibited innovation in the sector. He also called on Congress to establish clear crypto principles.

In December 2020, the SEC filed a lawsuit against Ripple Labs, saying that the company was offering XRP as an unlisted security.

The decision’s favorability greatly impacted XRP because it grew from $0.42 on July 3rd to $0.82, or nearly a 95% gain. Since then, the cryptocurrency asset has changed course and is trading for $0.74.