SEC Pushes for Federal Appeals Court Review on Cryptocurrency Registration Requirements

The Ongoing Debate on Cryptocurrency Regulation in the U.S.

SEC Pushes for Federal Appeals Court Review on Cryptocurrency Registration Requirements

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. 

Customer Stories

See how leading enterprise in-house teams have scaled smarter with Legal.io's high-caliber flex talent.

More from Legal.io


Big Law Partner Pay Entering “Whole Different World” as 2024 Closes

After 2024, “it’s a whole different world” when it comes to Big Law compensation, as more than one third of Am Law 200 and beyond plan to make changes to their equity partner compensation models, either by stretching the spread or revising compensation criteria.

Dec 16, 2024
Read More
You Can Live Without a Big Brand on Your Resumé – Here’s Why
You Can Live Without a Big Brand on Your Resumé – Here’s Why

Many people think they need their resumé to be peppered with illustrious, big-name firms in order to stand out. The irony, though, is that simply having worked for a company with an office in every global financial center doesn’t actually make you a better lawyer. Of course, when it comes to moving upwards in your career, it’s not always about how good you are but about how good you can show yourself to be. And a well-known name on your resumé is one way to establish some credibility – after all, a firm that takes you onboard might think 'you can’t be too bad!' But if your career to date hasn’t been a parade of plush offices adorned by paintings of the firm’s 19th-century founders, don’t worry – it’s by no means the only way to stand out. Here’s how to shine regardless of where you’ve worked.

May 19, 2020
Read More
Change of H-1B Workplace Requires Amended Petition
Change of H-1B Workplace Requires Amended Petition

H-1B holders working at multiple worksites must have a Labor Condition Application (LCA) on file for each worksite.

Aug 19, 2015
Read More
Telegram CEO’s Arrest Raises Global Debate Over Platform Responsibility and Free Speech
Telegram CEO’s Arrest Raises Global Debate Over Platform Responsibility and Free Speech

Telegram CEO Pavel Durov’s arrest in France over alleged moderation failures intensifies the global debate on intermediary liability and free speech.

Aug 26, 2024
Read More
Blockchain's Role in Modern Digital Summons

Courts are increasingly allowing digital methods, including blockchain and NFTs, to serve court summons, particularly in cases involving cryptocurrency fraud.

Jun 05, 2024
Read More
Ready to hire?

Schedule a free consultation to discuss your hiring needs.

Free 15-min consultation
Legal.io Platform
5 star reviews
Hiring made smarter

Easy-to-use platform for hiring legal talent, managing spend, and optimizing your panel — plus an average savings of 50%.

Need Immediate Help?

Submit a hiring request and let our experts handle the entire process for you.