XRP price wipes out 12% gains after SEC signals appeal to Judge Torres’ ruling
- The US SEC signaled its intention to appeal the ruling in the SEC vs Ripple lawsuit, arguing that the court failed to properly apply the law.
- The development has resulted in a wipeout of XRP’s recent gains, the altcoin’s price dipped 12% on Binance, since Friday.
- XRP price is $0.7738 at the time of writing, nearly 17% below its peak of $0.9375 from the day of Judge Torres’ ruling, July 13.
US financial regulator, Securities and Exchange Commission (SEC) recently signaled that it is prepared to appeal Judge Analisa Torres’ ruling in the SEC vs Ripple lawsuit. Since the judgement on July 13, there has been speculation among XRP holders regarding the SEC’s appeal and change in the Judge’s ruling on the case.
Pro-XRP attorney John Deaton has explained that despite an appeal, there is relatively low likelihood of Judge Torres’ ruling being overturned.
Also read: Ripple Europe Chief chases UK license after partial win in SEC vs Ripple lawsuit
XRP price declines after SEC shares plan to appeal the judgement
XRP price dropped 12% since Friday, against USDT on Binance. The altcoin wiped out its gains after news of the US SEC’s plan to appeal the ruling in the SEC vs Ripple case. The outcome of the lawsuit was out on July 13, fueling a massive rally in XRP and altcoins.
Between July 13 and 22, XRP price declined 17%. Ripple’s partial win fueled enthusiasm among XRP holders and pushed the altcoin to its local peak of $0.9375. At the time of writing, XRP price is $0.7738.
XRP/USDT one-day price chart Binance
SEC’s plan to appeal the ruling in SEC vs Ripple case
According to a recent Bloomberg report, the US SEC said that a federal judge (Judge Analisa Torres in this case) erred in ruling against the institution in a landmark crypto case. The regulator has signaled its intention to appeal the decision.
The SEC argued that the court failed to consider the evidence presented by the regulator and failed to apply the law to the presented facts. The regulator argues that there is potential harm to investors if Ripple Labs is allowed to continue operating without registering the XRP token as a security.
Find out more about the SEC’s plan here.
SEC vs Ripple lawsuit FAQs
Is XRP a security?
It depends on the transaction, according to a court ruling released on July 14:
For institutional investors or over-the-counter sales, XRP is a security.
For retail investors who bought the token via programmatic sales on exchanges, on-demand liquidity services and other platforms, XRP is not a security.
How does the ruling affect Ripple in its legal battle against the SEC?
The United States Securities & Exchange Commission (SEC) accused Ripple and its executives of raising more than $1.3 billion through an unregistered asset offering of the XRP token.
While the judge ruled that programmatic sales aren’t considered securities, sales of XRP tokens to institutional investors are indeed investment contracts. In this last case, Ripple did breach the US securities law and will need to keep litigating over the around $729 million it received under written contracts.
What are the implications of the ruling for the overall crypto industry?
The ruling offers a partial win for both Ripple and the SEC, depending on what one looks at.
Ripple gets a big win over the fact that programmatic sales aren’t considered securities, and this could bode well for the broader crypto sector as most of the assets eyed by the SEC’s crackdown are handled by decentralized entities that sold their tokens mostly to retail investors via exchange platforms, experts say.
Still, the ruling doesn’t help much to answer the key question of what makes a digital asset a security, so it isn’t clear yet if this lawsuit will set precedent for other open cases that affect dozens of digital assets. Topics such as which is the right degree of decentralization to avoid the “security” label or where to draw the line between institutional and programmatic sales are likely to persist.
Is the SEC stance toward crypto assets likely to change after the ruling?
The SEC has stepped up its enforcement actions toward the blockchain and digital assets industry, filing charges against platforms such as Coinbase or Binance for allegedly violating the US Securities law. The SEC claims that the majority of crypto assets are securities and thus subject to strict regulation.
While defendants can use parts of Ripple’s ruling in their favor, the SEC can also find reasons in it to keep its current strategy of regulation by enforcement.
Can the court ruling be overturned?
The court decision is a partial summary judgment. The ruling can be appealed once a final judgment is issued or if the judge allows it before then. The case is in a pretrial phase, in which both Ripple and the SEC still have the chance to settle.
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Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
