SEC Doubles Down On Appealing Against Ripple Ruling

SEC Doubles Down On Appealing Against Ripple Ruling

On Friday, the US Securities and Exchange Commission (SEC) doubled down in its efforts to appeal a judge’s ruling in its lawsuit against Ripple Labs.

The ruling had mostly been in favor of the crypto company and Ripple Labs has been trying to block the SEC from appealing against it.

The filing

The SEC said in the latest court filing that the summary judgment that had been issued back in July by US District Judge Analisa Torres had given rise to a number of legal problems.

The regulator said that these legal problems were the reason that needed a provisional or interlocutory review from a federal appeals court.

This is in accordance with a law that permits appeals to be filed against some rulings before a case comes to an end.

Torres ruled that the institutional and programmatic sales of the XRP token by Ripple had not been securities offering. Therefore, they were not required to register with the regulator.

The SEC wants to challenge the said ruling, as the judge had ruled that only some institutional sales could be considered unregistered securities trades because Ripple had used investment contracts for making them.

The argument

According to the SEC, Ripple has argued that an appeal cannot be filed because it would mean the law has to apply to undisputed facts in the record as well as because it would not end a lawsuit.

But, the regulatory body asserted that this was not the case. It said that appeals courts are permitted by law to review the applications of legal tests by district judges.

This is also applicable in determining whether a product can be categorized as a security or not. It also said that Ripple was wrong in claiming that a case has to end before a provisional appeal can be made.

The SEC said that the fastest way to reach the goal was through an interlocutory appeal and said that this would actually speed up the conclusion of the case as compared to what Ripple wants.

Further details

Last week in its own court filing, Ripple had said that the SEC wants to appeal issues based on facts and they are not appropriate for provisional review.

It also added that the resolution of the case would not speed up due to an immediate appeal by the securities regulator.

Ripple stated that there are three conditions that need to be fulfilled in order to file for an interlocutory appeal, but the SEC has not been able to establish even one.

It added that the request of the regulatory body should be rejected and the court should follow the instructions of the Second Circuit that the law should be used in accordance with the conditions listed.

The lawsuit had been initiated by the SEC against Ripple Labs back in December 2020 in which the regulator had accused the company of conducting an unregistered securities offering to raise $1.3 billion.

This year, after the conclusion of the discovery, the two sides had moved for summary judgment.