SEC Says Ripple Victory Ruling for XRP Holds No Weight for Other Cases

• SEC questions the legal influence of Ripple’s favorable ruling in its argument against Coinbase’s appeal.
• The regulator claimed Ripple’s non-security status for XRP sales remains unendorsed by other courts.
• A legal expert confirms Ripple’s ruling could be an isolated win in the industry.

The U.S. SEC has thrown shade on the decision of Judge Analisa Torres in the Ripple lawsuit, saying “no court has followed the ruling.” This critique was part of the SEC’s argument against Coinbase’s request for an interlocutory appeal. 

For context, in the SEC vs Ripple case, Judge Torres ruled in July 2023 that programmatic sales of XRP tokens through exchanges did not constitute securities offerings, thus not violating securities laws. This ruling affirmed that XRP is not a security, and token sales on exchanges do not constitute investment contracts.

However, the SEC’s recent complaint against Coinbase alleges that the cryptocurrency exchange has been acting as an unregistered intermediary for “crypto asset securities.” The SEC believes that the digital assets listed on Coinbase’s platform are securities, and sales through the platform are investment contracts. This view directly conflicts with Judge Torres’s ruling that tokens like XRP sold on exchanges are not securities.

Now, in their latest filing against Coinbase’s appeal, the SEC remarked that “no court has followed Ripple.” The argument implies that other courts have not echoed the legal reasoning or precedent established in the Ripple case and thus cannot apply in Coinbase’s case. 

This statement suggests that the SEC views the Ripple decision as an outlier, potentially lacking in legal influence or validity.

Reacting to the development, pro-XRP lawyer Bill Morgan suggested that if other courts do not adopt the SEC vs. Ripple case ruling and the SEC wins its other major crypto lawsuits, Ripple’s victory regarding programmatic sales would stand in isolation. 

Essentially, it would mean that Ripple could continue its programmatic sales unregistered. However, the ruling may not necessarily serve as a legal precedent for other entities in the crypto industry.