The U.S. Securities and Exchange Commission (SEC) has filed a submitted a memorandum of law, asking the court for permission to appeal the July 13 court order on Ripple.
Meanwhile, the XRP price is down more than 13% over the past 24 hours, according to CoinGecko data.
The appeal specifically focuses on two central rulings: firstly, the decision that Ripple's offers and sales of XRP over crypto trading platforms wouldn't lead investors to expect profits based on others' efforts; and secondly, Ripple's distribution of XRP as payment for services doesn't qualify as an "investment of money" under the precedent set by SEC v. W.J. Howey Co.
The appeal of these decisions, according to the SEC, is essential as they deal with pivotal questions of law. Notably, another district court has already voiced disagreements with the initial Ripple order, bringing attention to the need for an appellate review. As reported by U.Today, Ripple CTO David Schwartz recently dismissed the importance of this decision.
The heart of the dispute revolves around whether the offers and sales of XRP by Ripple are considered "investment contracts" as stipulated under the Howey test.
When it comes to institutional sales, the court had affirmed that the Howey criteria were met. However, there have been differences in rulings regarding the classification of coins sold directly to institutional investors versus those sold to retail investors through secondary markets.
The ongoing legal battle has been under the microscope of crypto industry leaders and experts. The SEC's appeal motion underscores the importance of clarity in the burgeoning cryptocurrency sector. Ripple is seeking affirmation of the court's July decision, but the SEC believes that an interlocutory review could provide the necessary clarity and, thus, is urging for an immediate appeal.
The outcome of this motion could shape the trajectory for many similar cases in the crypto domain, making it a closely watched event by stakeholders and investors alike.