SEC Admits Underlying Assets in Ripple Case Not Necessarily Securities

The SEC Admits Underlying Assets in Ripple Case Not Necessarily Securities

The U.S. Securities and Exchange Commission (SEC) has acknowledged that the underlying assets in its case against Ripple and Terraform Labs may not constitute securities. However, it plans to appeal the judge’s ruling in the Ripple case, as it could have implications for its other ongoing litigations. The SEC’s motion for interlocutory appeal emphasizes that its primary concern was not whether the XRP token itself was a security. It argues that the court ruling in the Ripple case raises important legal questions that could impact other SEC cases, including those involving Coinbase and Binance.

The SEC’s arguments for an interlocutory appeal are as follows:

1. The SEC did not argue that the underlying assets in the Ripple and Terraform Labs cases were necessarily securities.
2. There is a substantial difference in opinions and interpretations of the law, as demonstrated by the decision in the Terraform Labs case.
3. Granting the order of interlocutory appeal would advance the resolution of the case, as delaying the appeal until after the final judgment would be inefficient.

The SEC is also requesting a stay of remedies and pretrial proceedings until the appeal is resolved, and Ripple has until September 1 to respond to the motion.

Despite the SEC’s admission, the XRP community has focused more on the possibility of a potential appeal. Crypto lawyer John Deaton believes that the asset holders played a role in the SEC’s concession by including it in their amicus brief. However, the admission has not affected XRP’s price performance, as the asset is up 0.48% in the past 24 hours. Its value stood at $0.50 at the time of writing, with recent market volatility erasing its gains following the SEC victory.

Hot Take

The SEC’s admission regarding the underlying assets in the Ripple case not constituting securities is a significant development. It highlights the complexity and uncertainty surrounding the regulation of cryptocurrencies. While the SEC plans to appeal the judge’s ruling, this case could potentially set a precedent for future litigations involving digital assets. The outcome of the appeal will be closely watched by the crypto community and could have far-reaching implications for the industry as a whole.