The United States Securities and Exchange Commission (SEC) is gearing up to challenge the part of the decision from its legal saga with Ripple Labs by seeking an “interlocutory” review.
In a letter to Judge Analisa Torres on Wednesday, August 9, the SEC asked the judge put the case on hold as it had planned to seek an interlocutory appeal over her decision to rule programmatic sales of XRP, the sales to retail investors through crypto exchanges, not securities.
#XRPCommunity #SECGov v. #Ripple #XRP BREAKING: SEC Files Letter outlining its basis for filing a Motion for Leave to File an Interlocutory Appeal regarding “Programmatic” offers and sales to XRP buyers over trading platforms and Ripple’s “Other Distributions.”…
— James K. Filan 🇺🇸🇮🇪 (@FilanLaw) August 9, 2023
The agency, citing Terraform case, said that her decision warrants a fresh look by an appellate court as a judge in Terraform Labs case rejected Torres’ approach, saying that crypto assets sold on exchanges could also be securities. The securities regulator said that this had created a split and asked the court to halt the case proceedings “during the pendency of the SEC’s motion and potential appeal” as the result of this appeal could affect other pending cases.
The letter reads:
“Interlocutory review is warranted here. These two issues involve controlling questions of law on which there is substantial ground for differences of opinion, as reflected by an intra-district split that has already developed.”
What Does Interlocutory Appeal Mean for Ripple and Going Forward
The SEC and Ripple have been embroiled in a legal fight since 2020 when the agency sued Ripple, CEO Brad Garlinghouse, and co-founder Christian Larsen for raising over $1.3 billion through the sale of unregistered XRP security since 2013.
As reported, on July 13, 2023, Ripple secured a partial victory after the judge ruled that XRP sales to retail investors through crypto exchanges and other distributions didn’t constitute securities. Only the institutional sales were securities.
While the crypto community celebrated the decision, legal experts were sure the SEC would appeal the decision. Now the plaintiff has decided to file an interlocutory appeal. An interlocutory appeal is an application to “an appellate court challenging a non-final trial court order that decides an issue” but does not result in the final judgment.
As the decision about programmatic XRP sales is a summary judgment, not a final judgment, SEC can seek an interlocutory review of XRP sales to retail investors. As noted by lawyer Jeremy Hogan, the SEC is not “appealing whether XRP itself is a security – just its losses on the programmatic and individual sales issues.” Similarly, Ripple could also file an interlocutory appeal about its institutional sales.
AND… the SEC continues making questionable decisions, requesting an interlocutory appeal.
Note that it is NOT appealing whether XRP itself is a security – just its losses on the programmatic and individual sales issues. https://t.co/GziVLp23mT
— Jeremy Hogan (@attorneyjeremy1) August 9, 2023
Before this, Analisa Torres said the court planned to schedule a jury trial for the second quarter of 2024. This means the final judgment is still far away, and an interlocutory appeal could push the dates further. Jeremy Hogan believes that these delays are good for Ripple and XRP.
The individual Defendant's trial will begin around May 2024. That means Final Judgment in this case won't be entered until…late summer 2024 (at earliest). Any appeal would go well into 2025.
The glove is on the other hand now,
delays are GOOD for XRP and Ripple. #legalclarity https://t.co/C1VMrU6Wm1— Jeremy Hogan (@attorneyjeremy1) August 9, 2023
