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

Legal experts anticipated the regulatory agency’s appeal of Judge Torres’s 2023 verdict, which established that secondary sales of Ripple’s XRP (XRP) did not constitute securities sales.

Torres ruled that XRP was not a security in and of itself because the digital assets failed to satisfy all the conditions listed in the SEC’s Howey test to classify a financial asset as an investment contract.
 

Because of this, secondary sales cannot be labeled as unregistered securities sales, Torres ruled. However, Torres also explained that early sales from the Ripple founders to institutional investors did constitute securities sales due to the manner in which the sales were conducted.

At the time, the ruling was hailed as a major victory for Ripple Labs and the broader cryptocurrency industry.