The United States Securities Exchange Commission has made moves to appeal the recent ruling in its lawsuit against Ripple. In a letter addressed to Judge Analisa Torres on August 9, 2023, the SEC contended that the court’s decisions on two key aspects of the lawsuit are wrong and carry significant implications for enforcing securities regulations.
In the prior ruling, Judge Torres had determined that the cryptocurrency XRP does not qualify as a security sold to individual investors on public crypto exchanges. However, she ruled that XRP should be classified as a security solely when distributed to institutional investors.
The U.S. SEC objected to specific parts of Judge Torres’s judgment, specifically disputing her conclusion that Ripple’s “Programmatic” offers and sales to XRP buyers via crypto asset trading platforms, as well as Ripple’s “Other Distributions” in exchange for labor and services, do not fall within the category of securities offerings according to the Howey test.
The SEC asked the court to sanction the appeal for interlocutory review so that the rulings could be reviewed quickly and definitively.
According to the regulator, an interlocutory review is necessary because
“[t]hese two issues involve controlling questions of law on which there is substantial ground for differences of opinion, as reflected by an intra-district split that has already developed.“
The SEC also argued that an immediate appeal of the rulings would quickly advance the resolution of the lawsuit and also allow it to enforce the securities laws effectively.
Ripple is expected to respond to the SEC’s filing on August 16, 2023. The SEC also put forth a briefing schedule, requesting its opening brief to be two days later after Ripple is due to respond.
Ripple is expected to issue its response to the SEC’s filing by August 16, 2023. The SEC has also outlined a briefing schedule, with its opening brief slated for submission two days after Ripple’s response.
Although speculations had been circulating regarding the SEC’s intention to contest the July 23 ruling, Stuart Alderoty, Ripple’s Chief Legal Officer, unequivocally dismissed these notions while speaking on the TechCrunch podcast on July 26, 2023. Alderoty affirmed that Ripple remains steadfast and unwavering in the face of any legal actions initiated by the SEC.
As of press time, Ripple has not released an official statement regarding the matter.
As the legal tug-of-war persists, the outcome of this lawsuit between Ripple and the SEC holds implications not only for the entities involved but for the broader regulatory landscape of the cryptocurrency industry.
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