Following the recent court verdict in favor of XRP in the Ripple Labs lawsuit, the U.S. Securities and Exchange Commission (SEC) has suggested a possible appeal.
Regulators believe the decision contradicts established securities law principles. In addition, it challenges the time-honored Howie test used to classify investment contracts.
Do we really want judges to ask themselves, “Will my rigorous application of the Howie test in this case result in 2023 consistent with the policy implications behind the 1934 law?” https://t.co/acMNRc00B6
— John E Deaton (@JohnEDeaton1) July 22, 2023
The SEC’s suggestion to appeal stems from court documents. These documents indicate that the Commission is currently “considering various avenues for further consideration.” therefore, SEC Ripple Labs’ ruling may be challenged.
However, this was not a stand-alone statement. The SEC expressed concern as follows: response Supports motion to remove Terraform Labs and its founder Do Kwon. The lawsuit also deals with allegations of multi-billion dollar cryptocurrency securities fraud.
In its response, the SEC noted similarities between the Ripple case and the Terraform case. However, they expressed concern about the perceived additions to the Howie test in the Ripple ruling. These include references to programmatic sales and other sales. Additionally, the SEC voiced its dissatisfaction with parts of the Ripple ruling state;
“With all due respect, these portions of Ripple were erroneously determined and should not be followed by this court. The SEC staff is considering various avenues for further review and will recommend that the SEC seek such a review.”
Chairman Gensler’s reply
In light of the above, SEC Chairman Gary Gensler expressed dissatisfaction with the court’s ruling. XRP. Gensler has approved that institutional tokens are considered securities. However, he expressed disappointment with the individual investor aspect of the ruling, saying the SEC is still “reviewing and reviewing that point.”
Gensler During his talk on artificial intelligence at the National Press Club, he was also asked about the urgent need for clear regulation of the industry. However, he declined to respond directly to such inquiries.
Following the position of the SEC, EkslowjahnftA prominent observer of the case highlighted the SEC’s seemingly contradictory positions. They posted a series of tweets highlighting the SEC’s rejection of the federal court’s “horizontal or vertical commonality” requirement for investment agreements under the Howie test.
The SEC, who claims the court didn’t follow Mr. Howie, is rich… The SEC acknowledged on its website that the Fed’s courts needed commonality, but went on to say that they neither sought commonality in their analysis, nor viewed commonality as a separate part of Howie. If the SEC… https://t.co/CX6Kwfh3cJ
—exlawyer.eth/tez (@exlawyernft) July 22, 2023
They also argued that the SEC has ignored federal law and the courts, and asked when Congress would hold the SEC and Gensler accountable for actions that could harm Americans.
This unfolding narrative adds a new chapter to the ongoing debate on the classification and regulation of digital assets. The field continues to evolve as the field matures.and regulatory If groups and companies like Ripple Labs work on these landmark cases, the results could set an important precedent for the future of the cryptocurrency industry.
As of 19:00 UTC on July 22, sellers lowered the XRP price from its monthly high. $0.8875 It fell 16% in a few days to $0.7469 on July 13.
XRP remains the top 10 digital assets by market capitalization at around $39 billion, despite the drop in market value due to price declines. The coin has continued to hit $1 billion in daily minimum trading volume for the past week, according to data from cryptocurrency price tracker CoinMarketCap.
The decline suggests that the XRP market is stabilizing as traders profit from the recent price surge.
XRP/USD 24-Hour Price Chart (Source: coin market cap)
An article that the SEC is considering appealing the XRP verdict in the Ripple Labs case first appeared on MetaNews.