On October 2, 2024, the U.S. Securities and Exchange Commission (SEC) filed a notice of appeal in its ongoing lawsuit against Ripple Labs, seeking to overturn a pivotal ruling from earlier this year. This latest development has left the cryptocurrency community on edge, especially XRP holders, who are witnessing the fallout in real time.
The controversy began with a 2023 verdict from Judge Analisa Torres, who ruled that secondary sales of Ripple’s XRP token do not qualify as securities transactions. In her decision, Judge Torres concluded that XRP did not meet all the criteria established by the SEC’s Howey test for classifying an investment contract. This ruling was seen as a significant victory for Ripple, which has long argued that XRP should not be treated like a security.
Defense attorney James Filan shared the appeal details via social media platform X, igniting discussions among crypto enthusiasts and legal experts alike. Ripple’s Chief Legal Officer, Stuart Alderoty, expressed his disappointment at the SEC’s decision to appeal, calling it “not surprising.” He emphasized that the ongoing litigation serves as an “embarrassment for the agency,” highlighting the SEC’s continued “litigation warfare against the industry.” Alderoty also hinted that Ripple is considering whether to file a cross-appeal, indicating that the legal battle may not be over yet.
Ripple CEO Brad Garlinghouse weighed in on the situation as well, addressing followers on X on October 3. He suggested that if SEC Chair Gary Gensler and his team were acting rationally, they would have moved on from this case long ago. Garlinghouse reiterated Ripple’s commitment to fighting back against what he described as an unfounded regulatory approach.
In a surprising turn, Massachusetts Senate candidate John Deaton took to X to voice his thoughts, claiming that it is unusual for a political candidate to comment on an appeal. His fiery remarks add another layer of complexity to the ongoing discourse surrounding Ripple and its legal challenges.
XRP Faces Market Turmoil
As the news of the SEC’s appeal spread, it sent shockwaves through the XRP market. Investors reacted swiftly, leading to a significant sell-off that caused XRP’s price to plummet by 12% on the day. The asset, which was trading above $0.60 on October 2, dipped to just below $0.53 during early trading in Asia on October 3. This marks a three-week low for XRP, which remains down a staggering 84% from its all-time high of nearly $3.84 recorded in January 2018, despite recent optimism surrounding cryptocurrency ETF applications.
Also Read: Bitwise Files For XRP ETF – Market Sees 65% Surge In Trading Volume Amid 3.6% Price Dip
The situation underscores the volatility that often accompanies regulatory developments in the crypto space. As the SEC continues to pursue its appeal, Ripple’s legal team prepares for a protracted fight, leaving the market to speculate on the implications for XRP’s future.
In conclusion, as Ripple gears up for what promises to be a lengthy legal saga, the uncertainty surrounding XRP’s status as a security remains a crucial point of contention. Investors are left to navigate a turbulent market while Ripple asserts its resolve to push back against regulatory challenges. With the legal landscape continuously evolving, all eyes will be on Ripple and the SEC in the coming months.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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