Ripple Labs says it opposes SEC move to file an appeal

Quick Take

  • Ripple Labs said it opposes the SEC’s move last week seeking leave for an interlocutory appeal of the summary judgment order in a case that rocked the industry.

Ripple Labs said it opposes the Securities and Exchange Commission’s move last week seeking leave for an interlocutory appeal of a summary judgment order in a case that has rocked the industry.

“We oppose the SEC’s request for an interlocutory appeal,” Ripple Chief Legal Officer Stuart Alderoty said on the social media site formerly known as Twitter. “There is no extraordinary circumstance here that would justify departing from the rule requiring all issues as to all parties to be resolved before an appeal.” 

Ripple has been embroiled in a legal fight with the SEC since 2020 when the agency accused Ripple of raising $1.3 billion in 2020 through the sale of XRP, which it says is an unregistered security, while also charging Ripple CEO Brad Garlinghouse and co-founder Chris Larsen.

U.S. District Judge Analisa Torres ruled last month that some of Ripple’s sales, called programmatic, of XRP did not violate securities laws because of a blind bid process in place for them. The move was widely celebrated in the crypto community and sent the price of XRP surging.

Torres also ruled that other direct sales of the token to institutional investors were securities, leaving a partial win for the SEC.

The SEC's appeal

The SEC said last week that it planned to challenge the partial defeat in its ongoing case against Ripple Labs, telling the court in the Southern District of New York that it will seek an an interlocutory appeal.

An interlocutory review is warranted, the SEC had said in its letter to Torres last week and cited a recent case against Terraform Labs, where a judge rejected Torres’ approach. 

The SEC is looking to specifically appeal the part of the decision about the programmatic sales as well as “other distributions” that included offers and sales of XRP in exchange for goods and services, an SEC official said in a media briefing last week.

What's next 

The SEC needs approval from the United States District Court Southern District of New York to appeal, and then from the court of appeals. If both of those things happen, then the SEC would need permission from the Second Circuit which then would look into the interlocutory appeal.

(Updated to include additional details.) 

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