The US Securities and Exchange Commission (SEC) has added additional documents to its lawsuit against Terraform Labs and its CEO Do Kwon.
The SEC is Already Indicating That it Would Appeal the Ripple Judgements
The US Securities and Exchange Commission (SEC) has added additional documents to its lawsuit against Terraform Labs and its CEO Do Kwon, asserting that the latest Ripple ruling was flawed and subject to appeal.
The SEC is already indicating that it would appeal the Ripple judgements, which found that the company did not break the law when it offered its native token, XRP, to retail investors but did so when it came to institutional investors. The Howey test, a legal evaluation that determines whether a financial instrument qualifies as an investment contract and, consequently, is subject to SEC regulation, is at the heart of the debate.
The action follows a filing made earlier this week by Terraform's attorneys, who said that the Ripple rulings strengthened their argument and supported their plea to have the lawsuit dismissed. The SEC feels that the judge in the Ripple case should overturn recent findings regarding the retail sales of XRP because the business "creates an artificial distinction between the expectations of sophisticated institutional and retail investors."
In the meantime, Stu Alderoty, general counsel at Ripple, predicted that after a recent judicial decision that investors viewed favorably, US banks will resume using the fintech company's On-Demand Liquidity (ODL) product.
