2023-08-10 10:24:30 ET
The U.S. Securities and Exchange Commission (SEC) is not easing up on its cryptocurrency crackdown, announcing plans to appeal a landmark court decision involving %RippleLabs and its %XRPDigitalToken .
In a letter, the SEC asked U.S. District Court Judge Analisa Torres to let a federal appeals court review her July 13 decision in which she ruled that the sale of Ripple's XRP cryptocurrency on public exchanges complied with federal securities laws.
The ruling was seen as a victory for crypto advocates and viewed as a setback for the SEC’s ongoing efforts to regulate digital coins and tokens.
In requesting an appeal of the court decision, the SEC said the outcome of such an appeal would have consequences for its ability to enforce securities laws going forward.
The SEC continues to claim that cryptocurrencies are securities and should be regulated like stocks and bonds.
The Wall Street regulator sued Ripple and its chief executive officer (CEO) Brad Garlinghouse in 2020, accusing them of illegally raising more than $1.3 billion U.S. by selling XRP to investors.
However, Judge Torres ruled against the SEC and said that Ripple did not break the law when the XRP token was sold on public exchanges because investors had no reasonable expectation of a return.
The ruing sent the price of XRP up sharply. The smaller cryptocurrency has now gained 87% this year, outpacing Bitcoin’s 78% increase on the year.
Torres' decision was not a total victory for Ripple, however, as she found that the company did violate securities laws by selling XRP to institutional investors.
The judge must now decide whether to let the SEC appeal her July decision.
Under current chair Gary Gensler, the SEC has brought more than 100 legal actions related to cryptocurrencies over the past two years.
Cryptocurrency exchanges %Coinbase (), the largest U.S. digital platform, and privately held Binance, the world's largest crypto platform, are each being sued by the SEC currently.
Many of the legal actions brought against cryptocurrency firms by the SEC have been settled out of court.