The United States Securities and Exchange Commission (SEC) filed a notice of appeal in the Ripple lawsuit on Oct. 2, aiming to overturn a ruling by Judge Analisa Torres.

Legal experts had anticipated the SEC would appeal the 2023 decision, which determined that secondary sales of Ripple’s XRP were not considered securities transactions.

Judge Torres ruled that XRP itself was not a security, as it did not meet all the criteria in the SEC’s Howey test, which is used to classify financial assets as investment contracts.

As a result, Torres concluded that secondary sales could not be classified as unregistered securities transactions.

However, she also determined that early sales made by Ripple’s founders to institutional investors did qualify as securities transactions due to how they were executed.

This ruling was seen as a major win for Ripple Labs and the broader cryptocurrency sector at the time.

On the same day the SEC filed its notice of appeal, the agency announced that its chief enforcement officer, Gubir Grewal, would step down on Oct. 11.

Grewal had faced criticism for his harsh enforcement actions against the cryptocurrency industry, having initiated more than 100 enforcement measures during his time in office.

Although the SEC has not officially named Grewal’s successor, Sanjay Wadhwa, the deputy director of the SEC’s enforcement division, has been appointed as interim chief enforcement director until a permanent replacement is found.

Interest in XRP may be growing among institutional investors.

As Cointelegraph reported, Bitwise filed for an XRP ETF trust in Delaware on Sept. 30. The filing, which appeared on the state’s Division of Corporations website, indicates that Bitwise is exploring the possibility of an XRP ETF.

However, this initial Delaware filing is not an SEC filing, and due to the recent legal appeal, SEC approval for the XRP trust may face delays.

Sources:

https://cointelegraph.com/news/sec-files-notice-appeal-ripple-lawsuit

https://x.com/FilanLaw/status/1841585433274204454