Last Friday, the U.S. Securities and Exchange Commission (SEC) sought permission to appeal a federal judge's decision that sales of XRP through exchanges did not violate securities law. This move came a day after the judge allowed the SEC to present its argument.

The SEC petitioned Judge Analisa Torres of the U.S. District Court for the Southern District of New York to certify an interlocutory appeal, which is an appeal filed before the overall case is concluded. This request was made a day after the judge permitted it to be made.

The federal regulator is specifically challenging the judge's ruling that Ripple's programmatic sales of XRP did not violate securities law. The SEC argues that retail investors purchasing the asset on an exchange would not have the same expectations as an institutional investor purchasing XRP directly from Ripple.

The SEC's appeal focuses on legal determinations about the existence of investment contracts based on undisputed facts. The ruling could have a significant impact on other SEC cases, including its suits against Coinbase and Dragonchain, as well as other legal matters like bankruptcies (source).

In its filing, the SEC noted that its argument centered on the sales of XRP, rather than the asset itself. The SEC clarified that it did not argue that the underlying assets were necessarily a security, emphasizing that the underlying assets here are nothing but computer code with no inherent value.

Ripple has until September 1, 2023, to file a response to the SEC's motion. The regulator will have another week to reply to the response after that. If the SEC wins Judge Torres' approval for interlocutory appeal, it will need to petition the Second Circuit Court of Appeals to take up the case.

The SEC's appeal against the federal judge's ruling on XRP sales marks a significant development in the ongoing legal battle between the regulator and Ripple Labs. The outcome of this appeal could have far-reaching implications for the crypto industry and set a precedent for future cases.