The U.S. Securities and Exchange Commission (SEC) just announced that a federal judge made a mistake in ruling against the institution in the landmark cryptocurrency case last week, signaling it will appeal the decision.
US District Judge Analisa Torres had sided with Ripple Labs that nearly half of its XRP sales did not violate investor protection laws. Torres' verdict gave hope to other defendants fighting the SEC over sales of cryptocurrencies, which the SEC says are often illicitly sold securities.
Do Kwon, the jailed co-founder of crypto firm Terraform Labs, is one of the defendants trying to use Torres' decision to defeat the SEC lawsuit. The agency charged Kwon with fraud and other legal violations in a complaint filed in Manhattan federal court in February.
In its statement, the SEC wrote that the judge in Kwon's case should not cite the Ripple case as a precedent. The SEC said Torres' decision “adds unfounded requirements” to testing when an asset is a security. The agency plans to seek “further review”, which will likely mean an appeal.
Lawyers for the SEC wrote that the decision was “impossible to reconcile with all these core securities law principles.”
*Not investment advice.