Key Insights
- Ripple’s legal team has challenged the SEC’s request for an appeal in their lawsuit.
- The lawyers argue that the SEC’s appeal is largely based on dissatisfaction with a previous ruling regarding XRP’s classification as a security.
- Ripple is urging the judge to deny the SEC’s request for an appeal or stay, stating that exceptional circumstances necessary for an appeal are absent in this case.
Ripple’s legal team is seeking to dismiss the appeal filed by the US Securities and Exchange Commission (SEC).
Lawyers representing Ripple said that the regulator’s dissatisfaction with the July court decision, according to which the XRP token largely does not fall under the category of securities, cannot be considered a valid reason for filing an appeal.
The Ripple team considers the SEC’s arguments unfounded
The filing, filed Sept. 1 in the U.S. District Court for the Southern District of New York, said the SEC’s grounds for appeal largely centered on dissatisfaction with the judge’s ruling that XRP could not be classified as a security if sold to retail investors.
The lawyers said the “exceptional circumstances necessary for an interlocutory appeal” were not present in the case and urged the judge to reject any request for an appeal or delay.
The SEC failed to attempt to meet the standard for deferment even after individual defendants pointed out this omission in their pre-petition letter, Ripple said. Individual defendants have already expressed their objections to the SEC’s request. Ripple joins this objection.
As a reminder, in August the Commission filed a motion to appeal and stay a July court decision in which Judge Analisa Torres ruled that XRP is not a security under SEC rules.
Ripple lawsuit with SEC lasted for almost 3 years
The SEC filed a lawsuit against Ripple, its CEO Brad Garlinghouse and co-founder Chris Larsen in December 2020. This forced major US crypto exchanges such as Coinbase and Gemini to delist XRP to avoid possible problems with the regulator. Following Judge Torres’ ruling, many of these companies said they would reopen token trading or would consider doing so in the future.
It’s sad that many in the US crypto community are forced to go to court to prove that the SEC is out of control and consistently gets the facts and laws wrong,” Garlinghouse said in an Aug. 29 tweet.
In 2023, the US Securities and Exchange Commission brought cases against a number of cryptocurrency companies, including Binance and Coinbase, over allegations of violating securities laws.
On August 29, asset manager Grayscale achieved a legal victory against the SEC after filing an appeal ordering it to reconsider its application to convert the GBTC trust into a spot Bitcoin ETF.
One way or another, Ripple’s proceedings with the US regulator are not over yet. Judge Torres has proposed a jury trial in this case in the second quarter of 2024.