SEC postures to appeal Ripple programmatic markets ruling

SEC lawyers said Judge Torres’ ruling about XRP sold on programmatic markets was “wrongly decided” and may soon call for a review


CryptoFX/Shutterstock modified by Blockworks


The US Securities and Exchange Commission (SEC) has hinted it will appeal the partial legal win notched by Ripple earlier this month.

US district judge Analisa Torres ruled on July 13 that Ripple did not breach securities laws through programmatic sales of XRP. But Ripple did violate SEC regulations when directly selling the token to institutional investors. 

In documents filed Friday as part of an ongoing case against Terraform Labs, the SEC said Torres’ ruling about programmatic sales was “wrongly decided.” The agency’s lawyers urged the court not to adhere to those conclusions.

“SEC staff [are] considering the various available avenues for further review and intends to recommend that the SEC seek such review,” they said.

On the other hand, the judge appropriately determined that Ripple’s public statements endorsing XRP generated a reasonable expectation of profits from the company’s efforts among institutional buyers.

The same conclusion should have been applied concerning retail buyers, the SEC said. Instead, the ruling “creates an artificial distinction between the expectations of sophisticated institutional and retail investors.”

Terraform Labs lawyers have attempted to use the Ripple ruling to support a motion to dismiss its own securities case.

While the crypto world waits for a potential SEC appeal, Ripple CEO Brad Garlinghouse suggested that new legislation would be preferable to crypto fans blaming a judge for “faithfully applying the law.”

“An important topic has come up about protecting retail. The SEC created this mess by proclaiming it was the cop on the crypto beat when it had no legal jurisdiction. Where’s that gotten us? Consumers left holding the bag in bankruptcy court while the SEC holds press conferences.”

“We all know legislation — not more regulation by enforcement — is the only way forward to provide clear rules and protect retail,” Garlinghouse said.

Updated Aug. 1, 2023 at 1:35 pm ET: Changed references of “secondary markets” to “programmatic sales.”

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