The U.S. Securities and Exchange Commission (SEC) called the court’s decision in the Ripple case “flawed” and said it is “considering the various available avenues for further review.”
“Contrary to Defendants’ assertions, much of the Ripple ruling supports the SEC’s claims in this case and rejects arguments Defendants have raised here,” a document filed by the financial regulator read.
“However, with respect to the Programmatic and other sales, the SEC respectfully avers that Ripple conflicts with and adds baseless requirements to Howey and its progeny. Respectfully, those portions of Ripple were wrongly decided, and this Court should not follow them,” it added.
The document stated that “SEC staff is considering the various available avenues for further review and intends to recommend that the SEC seek such review,” suggesting that the major Wall Street regulator is considering appealing the judge’s ruling.
U.S. District Judge Analisa Torres ruled in favor of Ripple Labs, highlighting that approximately half of its sales of XRP, the native token of the Ripple blockchain, did not violate the country’s investor-protection laws.
The SEC’s filing comes as Do Kwon, the currently imprisoned CEO and co-founder of the blockchain firm Terraform Labs, is trying to use Judge Torres’s ruling to beat the lawsuit the financial regulator filed against him and his company.
In February, the SEC filed a complaint in Manhattan federal court and accused the South Korean crypto executive of fraud and other legal violations.
The landmark ruling in the SEC vs. Ripple Labs case has had a positive impact on the broader cryptocurrency industry, which has been reeling since the collapse of Terraform Labs in May and FTX in November.
“The S.E.C. ruling that XRP is not a security helps to provide some clarity on that definition – something that desperately needed to be done. Ideally, this case will help provide a framework for other blockchain companies looking to do business in the U.S. and help them avoid similar roadblocks of Ripple,” Anthony Cerullo, Chief Communications Strategist at Walbi, the AI-powered hybrid DeFi platform, told International Business Times.
“It’s a huge win for the crypto industry. Not just for the obvious reason of market-wide price increases, but for the health of the crypto economy. The U.S. is in the midst of a “Great Exodus” with crypto companies packing up for more favorable regulatory conditions abroad. However, if this is a sign of things to come and the S.E.C. opens its cold heart a little to blockchain technology, then that bodes well for the entire world,” he added.
XRP saw a 5.48% loss and was trading down at $0.6962 with a 24-hour trading volume down by 11.26% at $1,702,635,173 as of 6:10 a.m. ET on Monday, according to the latest data from CoinMarketCap.
