Coinbase, Kraken and Gemini stay silent on XRP listing after SEC’s appeal
The legal battle between the U.S. Securities and Exchange Commission (SEC) and Ripple Labs has quickly entered yet a new phase after a federal judge allowed the agency to challenge a ruling that the XRP token isn’t a security when sold to the general public.
U.S. District Judge Analisa Torres has allowed the SEC to proceed with an “interlocutory appeal,” a move that could potentially lead to parts of her previous decision being overturned. In her July 13 decision, the same judge ruled that Ripple’s sales of the cryptocurrency XRP violated investor-protection laws only some of the time.
In the meantime, US cryptocurrency exchanges have remained tight-lipped regarding their intentions to re-list XRP on their platforms in light of the ongoing legal tussle between the SEC and Ripple. Despite Coinbase, Kraken and Gemini previously announcing plans to resume trading XRP, they have not responded to inquiries about whether they will suspend these plans given the recent developments in the case.
Although Ripple contested the charges, the legal battle with the SEC has taken years as the company fights the charges in court. Since then, crypto exchanges have been careful about not associating with illegal assets as those who kept the token listed on their platforms were at risk of being sued and fined if the SEC wins its case, and the court deems XRP sales as unregistered securities.
The case is pivotal in determining the SEC’s jurisdiction over cryptocurrencies, with the agency arguing for regulatory oversight similar to stocks and bonds. The question of whether Ripple’s XRP sales should have been registered with the SEC has been a central issue in the case since the agency’s lawsuit against Ripple in 2020.
The SEC’s appeal request follows its disagreement with the initial verdict, claiming that the court’s decision was “wrongly decided.” The agency argues that the ruling goes against “fundamental securities laws principles” such as the Howey test, which determines what falls under the category of an investment contract.
Ripple, on the other hand, remains confident in the judge’s ruling and expects that an appeals court will affirm or even strengthen it. The company’s lawyers explained that because the Securities and Exchange Commission (SEC) didn’t meet the requirements of the Howey test in relation to Ripple’s distribution of XRP — a legal aspect — the court should say no to the SEC’s request to file an interlocutory appeal.