Ripple Labs Counters SEC's Bid for Appeal, Asserting Legal Grounds

Ripple Labs Counters SEC's Bid for Appeal, Asserting Legal Grounds

Ripple's chief legal officer has stated that there are no exceptional circumstances justifying the court's acceptance of the SEC's request for an interlocutory appeal. Ripple Labs has expressed its disagreement with the U.S. securities regulator's attempt to file such an appeal regarding the summary judgment made by U.S. District Court Judge Analisa Torres on July 13th.

In a letter dated August 16th addressed to Judge Torres from the Southern District of New York, Ripple's legal representatives argued that since the Securities and Exchange Commission (SEC) did not satisfy the elements of the Howey test concerning Ripple's distribution of XRP, which is a "legal question," the court should dismiss the SEC's motion for leave to file an interlocutory appeal. An interlocutory appeal refers to appealing a trial court ruling while other aspects of the case are ongoing, and this is allowed only under specific circumstances.

Ripple's legal team asserted that it would be more appropriate for the SEC to appeal the court's decision after a final judgment has been reached with a complete record.

 

 

Ripple's lawyers put forth three main arguments against the SEC's request. Firstly, they argued that an appeal should involve a pure question of law, and the SEC's request doesn't introduce any new legal issues that require review.

Secondly, the lawyers contended that the SEC's assertion that the court misjudged the matter isn't enough, as the SEC must demonstrate that two courts are in clear disagreement over the subject matter – which is not the case here.

Thirdly, Ripple's legal representatives argued that an immediate appeal wouldn't expedite the conclusion of the ongoing litigation.

 

 

Stuart Alderoty, Ripple’s chief legal officer, emphasized that no "extraordinary circumstance" exists that would warrant deviating from the customary legal procedure:

“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.”

 

On July 13th, Ripple achieved a partial victory over the SEC in relation to the classification of XRP as a security. Judge Torres ruled that the XRP token itself is not a security. However, she noted that sales of XRP tokens might be deemed securities in specific situations, such as when they are sold to institutional investors, but not when sold on exchanges to retail traders.

 

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