The U.S. Securities and Exchange Commission has formally filed an appeal in its legal battle with Ripple Labs, challenging a July 2023 ruling that partially dismissed claims against the company. Filed late Wednesday, the appeal focuses on whether Ripple’s XRP sales to retail investors qualify as unregistered securities transactions under federal law.
Citing the Howey Test, the SEC argues that Ripple’s promotional efforts created an expectation of profits among investors, making XRP an investment contract. Ripple and the SEC did not immediately respond to Decrypt’s request for comment. While the regulator already filed its appeal in mid-October 2024, following the district court’s partial ruling in favor of Ripple in July 2023, Wednesday’s opening brief represents a formal step in the appellate process, where the SEC outlines its arguments to challenge the court’s prior decision.