Lawyers representing Ripple in its ongoing legal battle with the United States Securities and Exchange Commission (SEC) have taken a stance against the regulator’s attempt to appeal a recent court decision. In a filing submitted on September 1st to the U.S. District Court for the Southern District of New York, Ripple’s legal team asserted that the SEC had failed to meet the necessary requirements to request an appeal.
The core of the SEC’s appeal rests on its dissatisfaction with a prior ruling by Judge Analisa Torres, which declared that the XRP token did not qualify as a security for sales to retail investors under SEC guidelines. Ripple’s lawyers argued that the SEC’s grounds for an appeal primarily reflected its disagreement with this judgment and did not meet the exceptional circumstances required for an interlocutory appeal. They urged the judge to deny the SEC’s appeal request or stay.
Ripple’s legal team stated, “The SEC has not even attempted to meet the standard for a stay, even after the Individual Defendants identified that omission in their pre-motion letter. The Individual Defendants write separately to oppose the SEC’s request. Ripple joins that opposition.”
The SEC initially filed its lawsuit against Ripple, its CEO Brad Garlinghouse, and co-founder Chris Larsen in December 2020, leading to several cryptocurrency exchanges delisting the XRP token to avoid potential legal repercussions. However, Judge Torres’ July ruling largely favored Ripple’s argument that XRP was not a security, prompting some of the delisted exchanges to consider relisting the token.
Brad Garlinghouse, Ripple’s CEO, expressed his frustration with the SEC, stating, “It’s sad that so many in the US crypto community have to resort to the legal process to prove this SEC is out of control and consistently wrong on the facts and the law.”
The SEC has been actively pursuing legal actions against various cryptocurrency firms in 2023 over alleged securities violations, including Binance and Coinbase. In a separate development, asset manager Grayscale recently achieved a court victory against the SEC, leading to a review of its application for a spot Bitcoin exchange-traded fund (ETF). The civil lawsuit between the SEC and Ripple is ongoing, with Judge Torres proposing a jury trial for the case starting in the second quarter of 2024.