Can the SEC only appeal a conviction in an ongoing case?
On October 2, the US Securities and Exchange Commission (SEC) filed a notice of appeal in Ripple's case, intending to challenge the ruling by Judge Annalisa Torres. This appeal focuses on the 2023 ruling that Ripple's XRP secondary transactions did not qualify as securities sales. However, there is much speculation as to what exactly the SEC is interested in.
Software engineer Vincent Van Code, recently tweeted that the SEC will only appeal the August 24th penalty decision, not XRP's security status, which he believes is a positive sign for the crypto community. Bitwise suggests that this may be why it proposed an ETF.
However, former SEC attorney Mark Fagel disputed Van Code's statement that the SEC is appealing the court's ruling that the sale of the XRP program is not considered a sale of securities. He explained that although fines and damages may be included in the appeal, the main focus is on the decision on the sale of the program. The court distinguished between program sales and institutional sales, which are considered sales of securities.
Mark writes: “The district court held that program sales were not securities sales (as opposed to institutional sales). The SEC is appealing the program sale decision (and possibly the disgorgement and penalties as well, but that's not the case).
Despite ongoing legal battles, interest in XRP from institutional investors is increasing. On September 30, Bitwise Asset Management filed a request to establish an XRP exchange-traded fund (ETF) in Delaware. However, this filing is not with the SEC, and the appeal could delay approval of any XRP trust.
The SEC's formal appeal was sent to the US District Court in New York, which was directed against Ripple CEO Brad Garlinghouse and co-founder Chris Larson. The appeal follows the court's decision on August 7, 2024, which the SEC is now challenging.
