The SEC has asked the judge to ignore part of the recent decision in the lawsuit against Ripple on the grounds that it does not comply with existing securities laws and is subject to appeal, Bloomberg has reported.
The regulator filed a lawsuit against Ripple in 2020, accusing the company of distributing unregistered securities worth approximately $1.3 billion in the form of native tokens on the platform.
On July 13, Judge Analisa Torres ruled that selling XRP directly to institutional investors violated SEC rules, but not offerings to retail investors on exchanges.
In an updated complaint against Terraform Labs and its CEO, Do Kwon, the agency said the verdict "creates an artificial distinction between the expectations of sophisticated institutional and retail investors." According to the regulator, the ruling "erroneously converts" the decades-proven Howey test into a subjective standard.
The SEC has asked the court not to consider the decision in the Ripple case and has made it clear that it is considering filing an appeal.