The U.S. Securities and Exchange Commission (SEC) failed to convince a federal judge that its recent high-profile court loss against crypto company Ripple Labs should be overturned, according to a court ruling on Tuesday.
U.S. District Court Judge Analisa Torres, who ruled in July that Ripple’s sale of a cryptocurrency token directly to consumers did not constitute an illegally unregistered securities offering, wrote late Tuesday that the SEC had not shown in its appeal that the Decision sufficiently flawed is problematic. The regulator hoped to overturn the ruling before making a final ruling in the case next spring.
The news effectively represents another victory – albeit a smaller one – for Ripple, and the market reacted. According to CoinGecko, the company’s XRP token rose 6.8% to just over $0.54 before settling at $0.53 at press time.
The SEC will still have the opportunity to appeal Judge Torres’ decision, but only after the case is officially closed and a hearing on the remaining issues takes place next April.
This news is certainly a disappointment for the SEC, which hoped to soften the blow of its headline-grabbing loss to Ripple by arguing that Torres’ decision created so many “difficult legal issues” that it should be reviewed by a federal appeals court before the case is closed.
The case has likely received so much breathless attention — both from pro-crypto advocates and the SEC itself — because it represents perhaps the sharpest refutation yet of the SEC’s current position that most cryptocurrency companies participate in illegal securities schemes.
Judge Torres said in her July decision that Ripple’s XRP token was “not necessarily a security on its face.”
The day after this ruling, the crypto market as a whole rose by $73.5 billion to a market capitalization of $1.3 trillion. XRP shot up over 66% in the same period.
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