US SEC cannot appeal Ripple Labs decision; the judge rules. The U.S. Securities and Exchange Commission was denied permission to appeal a federal judge’s recent judgment on Ripple Labs. It has been considered a major setback for the government’s efforts to regulate the cryptocurrency markets.
The sale of Ripple’s XRP digital token on public exchanges conformed with federal securities laws, according to U.S. District Judge Analisa Torres in Manhattan’s ruling on July 13 since buyers had no reasonable expectation of profit based on Ripple’s efforts.
The SEC had asked for permission to challenge Torres’ conclusions about “programmatic” XRP sales and “other distributions” of the cryptocurrency as a form of payment for services, claiming that doing so would be crucial to a “large number” of claims.
However, the judge rejected the argument that an appeal would significantly advance the case’s resolution and did not find any “substantial grounds for difference of opinion” on her conclusions.
Additionally, she claimed that her conclusion was not at odds with a judgment made on July 31 by U.S. District Judge Jed Rakoff in Manhattan, who ruled the SEC had a “plausible claim” that Terraform Labs’ Terra USD token constituted security when traded on public exchanges.
Rakoff was compelled to accept any logical conclusions that the regulator was right, according to Torres, who stated that Rakoff had been thinking about Terraform’s move to dismiss the SEC complaint. On April 23, 2024, the Ripple case will go to trial.
Requests for comments made after market hours were not immediately answered by the SEC. Chris Larsen, the co-founder of Ripple, Brad Garlinghouse, and their attorneys did not immediately reply to similar inquiries.
The SEC charged Ripple with illegally selling XRP to raise more than $1.3 billion in an unregistered securities offering in their complaint from December 2020. The SEC has long asserted its authority to regulate digital assets since many are considered securities, like stocks and bonds.
Among its other lawsuits are those brought against Coinbase (COIN.O), the largest cryptocurrency platform in the United States, and Binance, the largest cryptocurrency platform in the world. Only certain XRP sales, according to Torres’ July ruling, violated federal securities laws. SEC v. Ripple Labs Inc. et al., U.S. District Court, Southern District of New York, No. 20-10832, is the case’s official title.
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