Ripple - New Development in the SEC Case! SEC Used Its Last Card for XRP!

There has been a new development in the Ripple-SEC case, and the SEC has filed an objection to the district court's decision regarding Ripple's XRP sales.

The SEC argued that all transactions involving XRP purchased by retail investors through crypto currency platforms fall within the scope of the Howey Test as securities.

At this point, the SEC argued that the previous decision, which stated that the XRP sales to retail investors did not violate securities laws under the Howey test, was incorrect and appealed to the appellate court for the decision to be overturned.

The SEC also accused Ripple of increasing demand for XRP and its price through its public statements. The SEC argued that Ripple's promotional activities created the perception that there was a high likelihood of investors, including retail buyers, making a profit from XRP.

The SEC also stated that the district court's decision regarding retail XRP sales was incorrect and included the following statements in its petition:

The court ruled that the sales made to institutional investors were securities, but erroneously determined that the sales made to retail investors were not securities.

Because retail investors bought XRP through cryptocurrency asset trading platforms and therefore did not know whether the seller was Ripple, a Ripple subsidiary, or someone else."

Stuart Alderoty, Chief Legal Officer of Ripple, described the SEC's case as "just noise" and said, "As expected, the SEC's appeal is a repetition of arguments that have already failed and will likely be rejected by the next administration. We will respond officially in due course."

What Happened?

In 2020, SEC accused Ripple of selling XRP, which it claimed was an unregistered security, and raising $1.3 billion through these sales.

In a long-running case, in 2023, Judge Analisa Torres of the US District Court for the Southern District of New York ruled that Ripple's XRP sales, referred to as retail, did not violate securities laws. However, she ruled that other direct token sales to institutional investors were securities. Judge Torres also ordered Ripple to pay a fine of $125 million.