The US Securities and Exchange Commission (SEC) said it intends to challenge a federal judge’s ruling that Ripple Labs Inc.’s XRP token isn’t a security when sold to the general public. The SEC will file an "interlocutory appeal" of a judge's ruling on Ripple's programmatic sales of XRP. The SEC said it was seeking "leave to" appeal part of a recent decision while other parts of the SEC's case proceed to trial. The regulator said approval of an interlocutory appeal could prevent the SEC and government from needing two trials.
A federal judge ruled that while Ripple's direct sales of XRP to institutional investors did in fact violated securities law. However, its programmatic sales to retail investors through exchanges did not. This split ruling really rubbed the SEC and Gary the wrong way. The SEC had sued Ripple in 2020, alleging that the firm was selling unregistered securities in XRP and started an all right out attack on the crypto industry.
After this news the SEC had hinted that it might appeal the ruling in a separate case. The argument as I see it is the SEC is now saying retail investors are informed enough to be compared to sophisticated investors which goes against all the talk they have had around needing to regulate to protect retail. The reason I'm drawing this conclusion is the XPR ruling essentially said, sales of XRP to sophisticated investors met the test for an investment contract under federal securities law because those buyers would have understood that Ripple was pitching a speculative value proposition for XRP with potential profits. Then the court said the retail sale was not an issue because of this lack of knowledge. So what is it SEC is retail smart enough to invest or are we dumb enough to need to be heavily regulated for our 'protection'...
I'm going to be interested to see of the SEC get their way as the initial ruling was seen as a positive outcome for the market. I don't think the SEC took it well that they did not get their desired outcome on both rulings and will go to extreme lengths to get what they want.