In the ongoing legal battle between Ripple Labs and the US Securities and Exchange Commission (SEC), Judge Torres has granted the SEC’s request to file an interlocutory appeal, marking a significant milestone in the case. This decision gives the SEC the opportunity to present its arguments before the appellate court and challenge the previous ruling by Judge Rakoff.
Judge Rakoff, in the Terraform Labs case against the SEC, strongly disagreed with the defendants’ assertions and rejected the rulings in Ripple, including Judge Torres’s application of the Howey test. He concluded that, at the Rule 12 stage, the SEC had effectively met its burden of alleging that the tokens issued by Terraform Labs qualified as securities.
However, the burden now lies with the SEC to provide robust justifications to support their appeal. They are required to file their motion by August 18, and Ripple and its defendants will have until September 1 to file their opposition papers. The SEC will then have until September 8 to file a reply if necessary.
Ripple CEO Brad Garlinghouse and Ripple’s Chief Legal Officer (CLO), Stuart Alderoty, have responded to the SEC’s request for an appeal. Garlinghouse took to social media to reiterate that, regardless of the outcome, XRP should not be considered a security, and criticized the SEC’s claim that he and Chris Larsen acted recklessly in their belief that XRP is not a security. He emphasized that the judge’s ruling on July 13 indicated that the SEC would need to provide evidence supporting their claims against him and Larsen.
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Alderoty also expressed opposition to the SEC’s request for an interlocutory appeal, arguing that there are no extraordinary circumstances present that would warrant deviating from the usual rule requiring the resolution of all issues involving all parties before an appeal can be considered.
These statements from Ripple’s top executives highlight their unwavering conviction that XRP should not be classified as a security. Garlinghouse’s assertion that XRP’s non-security status is beyond debate aligns with Ripple’s long-standing position on the matter.
John Deaton, a pro-XRP lawyer and founder of CryptoLaw, shared his thoughts on the case, anticipating an intense legal battle between Ripple and the US watchdog. He noted that the SEC’s categorization of different sales was not determined by Judge Torres, and mentioned that Judge Torres could potentially deny the motion for interlocutory appeal and offer an explanation for her decision, along with clarification regarding Judge Rakoff’s ruling. Regardless of the outcome, it is expected that the legal proceedings will be further prolonged, potentially lasting another 3-6 months.
This development in the Ripple case has significant implications for the future of XRP and its classification as a security. The outcome of the interlocutory appeal could shape the regulatory landscape surrounding cryptocurrencies and impact the perception and treatment of other digital assets by regulatory bodies.
The legal battle between Ripple and the SEC has garnered significant attention within the cryptocurrency community and the financial industry as a whole. Many stakeholders are closely following the case, as its resolution could have far-reaching consequences for the digital asset market and the regulatory framework governing it.
As the legal proceedings continue, it remains to be seen how Ripple and the SEC will present their cases and what impact the appellate court’s decision will have on the future classification of XRP. The outcome of this case could set a precedent for similar disputes in the future and provide clarity on the regulatory status of cryptocurrencies in the United States.
In the meantime, XRP investors and the broader cryptocurrency market will need to closely monitor the developments in this case and assess the potential impact on their investments. The outcome of the interlocutory appeal could have significant implications for the value and trading of XRP, as well as for the regulatory environment in which cryptocurrencies operate.
