The U.S. Securities and Exchange Commission (SEC) has officially filed a Notice of Appeal challenging aspects of Judge Analisa Torres’ July 13, 2023 ruling in the ongoing Ripple lawsuit. This move ends speculation in the crypto industry about the regulator’s next steps.

SEC Appeals – What’s Next for Ripple Labs?

The SEC filed this appeal notice just five days before the October 7 deadline, following Judge Torres’ $125 million fine on Ripple for XRP sales to institutional investors in August. While some thought that fine would conclude the case, others anticipated the regulator would pursue an appeal.

Fox Business reporter Eleanor Terrett highlighted a former SEC lawyer’s belief that the commission would “probably” appeal Judge Torres’ July 2023 ruling. The lawyer suggested the SEC is eager to prove that the outcome regarding Ripple’s programmatic XRP sales is incorrect.

With the appeal filed, the case will be further extended as the U.S. Court of Appeals for the Second Circuit analyzes the merits of the previous ruling.

Legal Experts Weigh In on Appeal’s Potential Success

The crypto community has been anticipating the SEC’s next move. Pro-XRP lawyer John Deaton predicted the SEC under Gary Gensler would appeal, calling it a waste of taxpayer money. Deaton believes the SEC will lose, with the Second Circuit likely ruling that the regulator failed to establish a “common enterprise” – a key component of the Howey Test.

If Deaton’s prediction holds, the case would return to Judge Torres. Former SEC lawyer Marc Fagel noted the SEC lacks sufficient evidence to prove Ripple’s promotional materials were presented to buyers.

However, James Farrell, another ex-SEC attorney, suggests the appellate court’s “de novo” review standard could lead to a fresh evaluation of evidence, disregarding Judge Torres’ previous findings.

This latest development ensures the high-profile Ripple case will remain in the spotlight, with potentially significant implications for XRP and the broader cryptocurrency industry.