The long-standing legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC) has taken another turn, with the regulator filing an appeal against the district court’s ruling. The SEC argues that the court misjudged key aspects, particularly the application of the Howey Test, which determines whether a transaction qualifies as an investment contract.
SEC’s Argument: XRP Sales Violated Securities Laws
According to the SEC, XRP token sales should have met the expectation-of-profits requirement under the Howey Test. The regulator also contends that noncash XRP transactions should still be classified as an investment of money, making them subject to securities laws. The appeal seeks to overturn the summary judgment favoring Ripple and reinforce its authority over crypto regulations.