What's Going On:
- Partial win for Ripple sends the value rocketing over 2x
- SEC appeal and the value is right back where we started.
- entire crypto market is affected by this
What are the SEC appealing ?:
Everything comes down to the application of the Howey Test to determine if an asset is an 'investment contract'. The Judge made a distinction between sales of XRP to retail traders and the programmatic sales of XRP early on. And in short said : retail sales are fine and the early sales were not. Hence why it was a 'partial' win.
What's the Howey Test ?
The Howey Test determines what qualifies as an "investment contract," subjecting the asset to U.S. securities laws. An investment contract exists if there is an "investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others.
What are the SEC arguing ?:
The SEC want to get the Howey test applied without any distinction between purchasers, argo if some are considered securities then they all are. This goes without saying would be bad for the value of XRP if they won their appeal.
Next Steps
Ripple have until the 1st of September to send their reply and in turn the SEC have until the 8th to reply back. Looking at the upward and downward pressure looks like we're due a breakout in early September.
Which way is your money on ?