The United States Securities and Exchange Commission (SEC) filed a notice of appeal in the Ripple lawsuit on October 2, seeking to overturn a ruling made by Judge Analisa Torres.
Legal experts had anticipated the regulatory agency’s appeal of the 2023 ruling, which determined that secondary sales of Ripple’s XRP did not constitute securities sales.
Judge Torres ruled that XRP was not a security by itself because the digital asset failed to meet all the conditions outlined in the SEC’s Howey test for classifying a financial asset as an investment contract.
As a result, Torres concluded that secondary sales could not be labeled as unregistered securities sales. However, she did determine that early sales from the Ripple founders to institutional investors did qualify as securities sales due to the way they were conducted.
The ruling was celebrated as a significant victory for Ripple Labs and the broader cryptocurrency industry at the time.
On the same day that the SEC filed its notice of appeal in the Ripple lawsuit, the agency also announced that its chief enforcement officer, Gubir Grewal, would step down on October 11.
Grewal has faced criticism for imposing harsh enforcement actions against the crypto industry, having suggested more than 100 separate enforcement actions during his tenure.
The government regulator has yet to formally replace Grewal, though Sanjay Wadhwa, the deputy director of the SEC’s enforcement division, has been appointed as the interim chief enforcement director while a permanent replacement is identified.
Meanwhile, interest in XRP appears to be growing within institutional circles. As reported by Cointelegraph, Bitwise filed for an XRP ETF trust in the state of Delaware on September 30.
This filing, which was made available on the state’s Division of Corporations website, indicates that the company is exploring an XRP ETF.
However, it is important to note that the initial filing in Delaware is not an SEC filing, and due to the recent legal appeal, SEC approval for the XRP trust may be delayed.
