The U.S. Securities and Exchange Commission (SEC) has officially filed an appeal challenging a July 2023 court decision that ruled XRP sales to retail investors were not unregistered securities. This appeal, filed on January 15 with the Second Circuit Appeals Court, seeks to overturn Judge Analisa Torres’ partial ruling in favor of Ripple Labs.

The SEC asserts that XRP, when sold to retail investors, should be classified as an unregistered security. It argues that Ripple’s promotional efforts led investors to expect profits, qualifying XRP as an investment contract under the Howey test. The agency also contends that XRP used in employee compensation and business deals was wrongly excluded from securities classification.

This move follows the SEC’s initial October appeal after its partial loss in the lawsuit filed against Ripple in December 2020. Judge Torres ruled that XRP was a security when sold to institutional investors but not retail buyers, as they lacked knowledge of the seller’s identity.

Ripple’s chief legal officer Stuart Alderoty dismissed the appeal, calling it a “rehash of already failed arguments.” Ripple CEO Brad Garlinghouse echoed this sentiment, accusing the SEC of repetitive tactics unlikely to succeed. Pro-crypto lawyer Jeremy Hogan described the appeal as underwhelming, noting the SEC’s lack of compelling evidence tying XRP retail buyers to Ripple’s promises.

Despite the legal developments, XRP’s price surged 10% over 24 hours, reflecting market resilience. Ripple has also cross-appealed, contesting a $125 million penalty ordered by Judge Torres for losing parts of the case.

The court process could take months, with Ripple expected to counter the SEC’s claims through written and oral arguments. This high-stakes battle underscores the ongoing uncertainty surrounding crypto regulation in the U.S.