Ripple Labs, the entity behind the creation of the XRP token, has received a favorable ruling. District court judge Analisa Torres has denied the United States Securities and Exchange Commission’s (SEC) request to appeal its defeat in the case.
Judge Torres, who previously ruled in July that Ripple’s direct sale of a cryptocurrency token to consumers did not violate securities regulations, stated on Tuesday that the SEC had not demonstrated significant flaws in her decision. The SEC had sought to challenge the ruling prior to the final judgment scheduled for next spring.
This development marks another, albeit minor, victory for Ripple, and the market reacted accordingly. The value of the company’s XRP token surged by 7.8% compared to last week, to slightly over $0.54 after the token.
Ripple scores win against SEC
While the SEC still retains the option to appeal Judge Torres’ decision, it can only do so after the case formally concludes following a trial on remaining issues set for next April. This outcome likely disappoints the SEC, as it had aimed to address what it deemed as significant legal challenges arising from Torres’ ruling before the case concluded.
The case has garnered extensive attention from both pro-crypto advocates and the SEC itself, primarily because it represents one of the most robust refutations to date of the SEC’s prevailing stance that many cryptocurrency companies are engaged in unlawful securities activities.
On July 13, Judge Torres issued a partial ruling in favor of Ripple, determining that the retail sales of XRP tokens did not meet the legal criteria for being classified as securities. However, the court did find that Ripple had violated securities laws by directly selling XRP tokens to institutional investors. In response, the SEC moved to appeal the decision, contending that there were significant legal ambiguities at play in this case.
The SEC initially filed a lawsuit against Ripple, along with its CEO Brad Garlinghouse and co-founder Chris Larsen, in December 2020. This legal action prompted numerous exchanges to delist the XRP token in order to preempt potential legal complications. Following Judge Torres’ ruling in July, many cryptocurrency firms indicated their intent to either relist the token or consider doing so in the future.
In recent months, the SEC has pursued several crypto firms on allegations of securities violations, including major cryptocurrency exchanges like Binance and Coinbase. On August 29, asset manager Grayscale secured a legal victory against the SEC through an appeal, leading to a review of its application for a spot Bitcoin exchange-traded fund.
