SEC Files Opening Brief in Appeal Against Ripple

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On Wednesday, the SEC submitted an initial argument in its attempt to reverse a previous court decision that had determined XRP was not considered a security when sold to individual investors.

In a ruling in July 2023, Judge Analisa Torres of the US District Court differentiated between different types of XRP sales, concluding that those on exchanges did not fit the definition of securities, while sales to institutional investors did.

As a result, in August of last year, Ripple was ordered to pay a civil penalty of $125 million for sales made to institutional investors.

The SEC then decided to appeal this decision, aiming to challenge the ruling regarding sales of XRP on secondary markets. In the brief shared by attorney James Filan, the SEC argues that both institutional and individual sales of XRP fall under the criteria for investment contracts as defined by the Howey test.

The regulator reiterates that Ripple’s sales of XRP, which amounted to over $2 billion, were unregistered investment contracts and violated federal securities laws.