Judge Analisa Torres has granted a request from the United States Securities and Exchange Commission (SEC) to file a motion for leave to file an interlocutory appeal in its case against Ripple Labs. The securities regulator sent a letter to Torres on Aug. 9, saying her decision could affect multiple pending court cases.
According to U.S. law, an interlocutory appeal occurs when a ruling by a trial court is appealed while other aspects of the case are still proceeding. The decision allows the SEC to file a motion by Aug. 18 requesting permission to bring a case to the U.S. Court of Appeals for the Second Circuit. Ripple will also be able to file an opposition to the motion.
The decision comes just a few hours after Ripple Labs voiced opposition to a potential appeal in the case. Ripple’s lawyers put forth three main arguments in opposition to the SEC’s request.
They first argued that an appeal requires a pure question of law and that the SEC’s request raises no new legal issues that need to be reviewed. They also argued that the SEC’s claim of an incorrect court ruling on the matter is not sufficient and that an immediate appeal will not advance the termination litigation proceedings.
Reminder – the request for appeal (even if granted) doesn’t change the fact that XRP is not a security. That’s not up for debate / trial. But the SEC continues to claim that Chris and I acted recklessly in believing that XRP is not a security. That’s utter nonsense. 1/2 https://t.co/pG7z0jsjlt
— Brad Garlinghouse (@bgarlinghouse) August 16, 2023
Torres ruled on July 13 that Ripple’s native XRP (XRP) token is not a security when distributed in public sales, but the ruling considered XRP a security in institutional sales.
The case against Ripple has been ongoing since December 2020, when the SEC sued Ripple and its two chief executives, Brad Garlinghouse and Chris Larsen, over allegations the company was offering an unregistered security.
In a recent interview with Bloomberg, Garlinghouse shared his belief that the SEC would face a lengthy appeals process. “As a matter of law, the law of the land right now is that XRP is not a security. Until there is an opportunity for the SEC to file an appeal, which would take years, frankly, we are very optimistic,” he noted. According to Garlinghouse, an appeal against the retail sales ruling would only further solidify the decision that Torres made.
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