According to Cointelegraph, the U.S. Securities and Exchange Commission (SEC) appealed the Ripple lawsuit on October 2, attempting to overturn an earlier ruling by Judge Analisa Torres.

Legal experts expect the SEC to appeal Judge Torres’ 2023 ruling that found that secondary sales of Ripple’s XRP did not constitute securities sales.

Torres ruled that XRP itself is not a security because the digital assets fail to meet all of the conditions under the SEC’s Howey Test for classifying a financial asset as an investment contract.

Therefore, secondary sales cannot be labeled as unregistered securities sales. However, Torres also explained that early sales by Ripple’s founders to institutional investors did constitute securities sales due to the method of sales.

At the time, the ruling was hailed as a major victory for Ripple Labs and the broader cryptocurrency industry.