SEC Appeals Ripple Ruling as XRP ETF Filing Emerges
The U.S. Securities and Exchange Commission (SEC) filed a notice of appeal against the historic ruling by Judge Analisa Torres in the Ripple case. The recent move comes amidst many shifts in the regulatory layout, from changes at the SEC itself to new institutional interest in XRP.
The appeal seeks to overturn Judge Torres' 2023 ruling, which held that secondary trades of Ripple's XRP token did not constitute trades in securities. In the same judgment, she found that XRP, as an asset per se, did not fulfill all criteria of the Howey test, the SEC's means of defining financial assets as investment contracts.
While the judge did rule that early sales from Ripple founders to institutional investors did constitute securities sales, secondary market transactions did not need to bear the same categorization, and so the ruling partially became a victory for Ripple Labs and, more generally speaking, the crypto industry.
The application for appeal was filed on the same day the SEC announced that its divisive enforcement chief, Gubir Grewal, will be leaving his post on October 11. Grewal has become a controversial figure for his aggressive stance against the crypto sector, filing more than 100 enforcement actions since taking up his post.
The agency said Sanjay Wadhwa, a deputy director in the enforcement division of the SEC, would be acting chief pending the appointment of a permanent replacement.
It would appear that, despite the legal uncertainty remaining, institutional interest in XRP is building momentum. On September 30, crypto asset manager Bitwise filed for an XRP ETF trust in Delaware.
