The fight between the securities watchdog and Ripple is far from over
The Securities and Exchange Commission (SEC) is pursuing an interlocutory appeal in its recent court case against Ripple Labs. On Wednesday, the regulator sent a letter to Judge Analisa Torres requesting a pre-trial motion for a leave to file the appeal. If approved, The SEC’s motion would delay the proceedings until the process plays out.
The SEC noted many unresolved issues in the case against Ripple, taking issue with Torres’ previous judgment that ruled programmatic sales of XRP were not considered securities. Torres ruled in July that XRP wasn’t a security when utilized in “programmatic” sales while retaining the idea that institutional sales satisfied Howey Test standards.
Lawyers for the SEC say an interlocutory review would “avoid the possibility of engaging in protracted remedies” in litigation. According to the regulator, that presumption would apply twice: once to institutional sales and again if the SEC appeals the judge’s final decision if Wednesday’s motion isn’t granted.
Potential issues arising from the ruling are a concern for the SEC in “various pending cases, including many in this Circuit where the alleged investment contracts were offered and sold by issuers—like Ripple—on crypto asset trading platforms or for non-cash consideration.”
Chief Legal Officer of Ripple, Stuart Alderoty, tweeted on Wednesday that the SEC doesn’t “have the ‘right’ to appeal just yet,” expressing that’s why they used the interlocutory appeal. He also said that Ripple would have a response to the appeal next week.
The allegations that executives Brad Garlinghouse and Christian Larsen participated in securities laws violations are specific complaints regarding the XRP token. While Ripple Labs is a defendant, it encounters a separate set of charges and has not been implicated in aiding and abetting any of the violations.