Business News Report
October 04, 2023

SEC Denied Interlocutory Appeal Confirming XRP Non-Security Status

In Brief

The Securities and Exchange Commission appeal attempt has been rejected, establishing that XRP isn’t classified as a security.

SEC Denied Interlocutory Appeal Confirming XRP Non-Security Status

In a significant development in the crypto regulatory landscape, the court has rejected the Securities and Exchange Commission’s (SEC) request for an interlocutory Ripple (XRP) appeal.

This decision essentially ratifies the prior ruling that Ripple Lab’s native digital token, XRP, does not fall under the category of a security. Brad Garlinghouse, CEO of Ripple, celebrated the decision, highlighting the Court’s application of the “Howey” test, which did not favor the SEC.

Background and SEC’s Allegations

The ongoing case originates from the SEC’s dispute with Ripple Labs, Inc. The conflict also involves its top executives, Bradley Garlinghouse and Christian A. Larsen. The SEC has leveled accusations against Ripple and its leaders. They are said to have taken part in the unauthorized sale of securities. Specifically, they allegedly violated Section 5 of the Securities Act of 1933.

The regulatory body also claimed that both Garlinghouse and Larsen further assisted Ripple in these purported violations.

The core issue centers on the SEC’s assertion about Ripple. They claim Ripple undertook unregistered XRP offers and sales. These sales spanned three categories. The categories are Institutional Sales, Programmatic Sales on digital asset exchanges, and Other Distributions.

Additionally, the SEC alleges unregistered individual XRP sales. Both Larsen and Garlinghouse were involved. Larsen accumulated about $450 million and Garlinghouse around $150 million.

Court’s Decision and XRP Defense

While Ripple did not contest its XRP offers and sales across interstate commerce without registration, the primary contention rested on whether the company sold XRP as a security. The SEC had put forth the argument that the sale of XRP resembled an “investment contract.”

However, after careful deliberation and application of the Howey test, the Court did not concur with the SEC’s characterization of XRP as a security.

This recent development reiterates the complexity surrounding cryptocurrency classifications and their regulatory implications. Ripple and the broader crypto community may gain more clarity and confidence in the evolving landscape of digital assets.

Disclaimer

In line with the Trust Project guidelines, please note that the information provided on this page is not intended to be and should not be interpreted as legal, tax, investment, financial, or any other form of advice. It is important to only invest what you can afford to lose and to seek independent financial advice if you have any doubts. For further information, we suggest referring to the terms and conditions as well as the help and support pages provided by the issuer or advertiser. MetaversePost is committed to accurate, unbiased reporting, but market conditions are subject to change without notice.

About The Author

Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master's degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.

More articles
Nik Asti
Nik Asti

Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master's degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.

Hot Stories
Join Our Newsletter.
Latest News

The Calm Before The Solana Storm: What Charts, Whales, And On-Chain Signals Are Saying Now

Solana has demonstrated strong performance, driven by increasing adoption, institutional interest, and key partnerships, while facing potential ...

Know More

Crypto In April 2025: Key Trends, Shifts, And What Comes Next

In April 2025, the crypto space focused on strengthening core infrastructure, with Ethereum preparing for the Pectra ...

Know More
Read More
Read more
Web3 On-Chain Data Insights: In April, Solana Tops Activity, Ethereum Sees Capital Inflows, Bitcoin Shows Structural Rebound
News Report Technology
Web3 On-Chain Data Insights: In April, Solana Tops Activity, Ethereum Sees Capital Inflows, Bitcoin Shows Structural Rebound
May 9, 2025
Exploring AI Revolution In Web3: Decentralized AI, Data Ownership, And The Road Ahead
Hack Seasons News Report Technology
Exploring AI Revolution In Web3: Decentralized AI, Data Ownership, And The Road Ahead
May 9, 2025
The Future Of AI Agents: Innovation, Challenges, And Opportunities
Hack Seasons News Report Technology
The Future Of AI Agents: Innovation, Challenges, And Opportunities
May 9, 2025
Adidas, Binance, And Coinbase: Major Crypto Partnerships Of May 2025
News Report Technology
Adidas, Binance, And Coinbase: Major Crypto Partnerships Of May 2025
May 9, 2025