In a brief filed late Wednesday, the SEC said it disagreed with an earlier ruling by the U.S. District Court for the Southern District that some XRP sales to retail investors did not violate securities laws. The agency ultimately asked the U.S. Court of Appeals for the Second Circuit to "vacate" the district court's decision, among other requests.
The SEC said: "The district court held that institutional investors had reason to expect to profit from the efforts of others because Ripple said its actions would increase the price of XRP. But the district court erred in finding that retail investors did not have the same expectations because they purchased XRP through crypto asset trading platforms and therefore did not know whether the seller was Ripple, an affiliate of Ripple, or someone else."
In this case, the SEC said that for years, Ripple tried to boost demand for XRP through public statements to "increase demand for XRP and thereby increase the price of XRP."
The SEC said: "As a result of these statements, all XRP investors (not just institutional investors who 'intended' to purchase XRP from Ripple) reasonably expected that Ripple's efforts to increase the price of XRP would result in profits. For example, statements on Ripple's website and social networking platforms and in news reports were equally applicable to retail and institutional investors." (The Block)