US District Judge Analisa Torres has rejected the appeal from the US Securities and Exchange Commission (SEC) in its lawsuit against Ripple Labs, a blockchain firm, regarding the sales of its cryptocurrency XRP. The judge had previously determined that certain institutional sales of XRP by Ripple were unregistered securities offerings, which violated federal laws. However, she also stated that other distributions of XRP by Ripple would not be considered securities transactions.
In response to the judge’s decision, the SEC had appealed, arguing that it could set a problematic precedent for applying securities laws to digital assets. But Judge Torres has now denied the SEC’s appeal, stating that the agency did not meet the requirements for an early appeal prior to the scheduled trial dates.
According to Judge Torres, if a buyer purchases XRP with the intention of selling it later for a profit, they have an expectation of profit. However, this motive does not result from the efforts of other parties.
This denial of the SEC’s appeal is a significant development for Ripple, which has been facing this lawsuit for several years. The lawsuit alleges that Ripple violated investor protection laws by selling over $1.3 billion worth of XRP without registering the offers and sales.
At the moment, the SEC has not commented on the court ruling, and it remains uncertain whether the agency will attempt to appeal further. However, the denial of the motion to appeal indicates that the case will proceed to trial, which is scheduled to begin in April 2024.
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