SEC Hints at a Potential Appeal to the Ripple Lawsuit

The U.S. Securities and Exchange Commission (SEC)is thinking about appealing a recent decision in the Ripple Labs lawsuit. This lawsuit found that XRP, Ripple's cryptocurrency, is not a security when sold to everyday people.

The SEC believes that the ruling contradicts key principles of securities laws, such as the Howey Test. This test helps determine whether something is considered an investment contract or not.

The SEC's views on the Ripple lawsuit were expressed in another lawsuit. This other lawsuit is against Terraform Labs and its founder, Do Kwon, for allegedly carrying out a huge crypto asset securities fraud.

In response to Terraform Labs' reference to the Ripple lawsuit, the SEC outlined its issues with the recent decision on XRP. It stated that parts of the Ripple ruling support the SEC's claims in this case. However, it also argued that some parts of the Ripple ruling were wrong, as they conflict with and add unnecessary requirements to the Howey Test.

The SEC's comments come shortly after SEC Chair Gary Gensler expressed his disappointment about the court's decision on XRP. In a recent interview, Gensler said that he was happy that the court ruled that a token for institutional investors is a security. However, he was disappointed about the part of the decision relating to retail investors.

At an event on the same day, Gensler was asked whether these court decisions highlight the need for clear industry regulation. However, he did not give a clear answer.