NEW YORK, Oct 2 (Reuters) - The U.S. Securities and

Exchange Commission said on Wednesday it is appealing a court

ruling that restricted its ability to regulate cryptocurrency

markets.

Wall Street's main securities regulator will ask the 2nd

U.S. Circuit Court of Appeals in Manhattan to review a July 2023

decision that the XRP token sold by Ripple Labs on public

exchanges did not meet the legal definition of a security.

The decision by U.S. District Judge Analisa Torres meant the

sales of the token, totaling about $757 million, were not

subject to investor protection laws that the SEC enforces.

If the appeals court agreed, or defined securities narrowly,

it could impede the SEC's ability to police the cryptocurrency

exchange Coinbase and other defendants selling or

making markets for newer, non-traditional financial products.

Torres also gave the SEC a partial victory, saying another

$728 million of XRP sales to institutional investors should have

complied with securities laws.

She fined Ripple $125 million in August, but put the fine on

hold pending an appeal. The SEC had sought $2 billion. Torres'

stay would last until the 2nd Circuit ruled, court records show.

Lawyers for Ripple did not immediately respond to requests

for comment on the SEC's notice of appeal, which was filed in

Manhattan federal court. Ripple could also appeal parts of

Torres' decisions that it disliked.