Judge Analisa Torres of the United States District Court for the Southern District of New York has granted permission to the SEC to file an interlocutory appeal in the Ripple Labs case.
Judge Torres received The consent came after the SEC wrote in a letter on Aug. 9 that her ruling could affect other court proceedings. Under US law, an interlocutory appeal is a court of first instance decision that is appealed while further litigation continues.
The judge’s ruling on July 13 says the SEC will prove the claims against Chris and me in court. We look forward (again) to proving the SEC wrong as a matter of fact and law. 2/2 https://t.co/qvS34XZbVJ
— Brad Garlinghouse (@bgarlinghouse) August 16, 2023
This development follows a previous ruling by Judge Torres on July 13 that Ripple’s XRP coin is not a security when distributed in public sales, but is considered a security in institutional sales. It follows.
The lawsuit against Ripple has been ongoing since December 2020, when the SEC sued Ripple and its CEOs Brad Garlinghouse and Chris Larsen. claim that the company provided unregistered securities;
Ripple Opposes SEC Request
Ripple Labs’ legal team has argued against the SEC’s interlocutory appeal for three main reasons. Ripple Labs’ legal team made three main allegations in response to the SEC’s request for an interlocutory appeal. One of their prior arguments was that the SEC’s motion did not provide any new legal issues for the court to address before deciding whether to grant the appeal.
1. The court’s order does not contain prevailing questions of law.
2 SEC Can’t Show Evidence…
— Eleanor Terrett (@EleanorTerrett) August 16, 2023
Second, the SEC’s attorneys said the SEC’s argument that the court made an erroneous decision was not persuasive because the SEC would have to prove that the two courts clearly contradicted each other.
The legal team representing Ripple said opening an appeal at this time would not result in a timely conclusion to the matter. Ripple’s attorneys also argued that an immediate appeal would not expedite resolution of the dispute.
Chief Legal Officer of Ripple, Stuart AlderotiSaid,
“There is no particular scenario here that would justify deviating from the rule requiring that all issues with all parties be resolved before appeal.”
Background of the Ripple Incident
The SEC filed a lawsuit against Ripple and two of its executives in December 2020, but the lawsuit has been going on for some time. The problem is, ripple‘s XRP cryptocurrency is configured as a security under the US Federal Securities Guidelines. The Securities and Exchange Commission (SEC) alleges that Ripple made an unregistered securities issue when selling XRP.
On July 13, Judge Torres ruled slightly in favor of Ripple. She ruled that XRP coins offered to retail investors are not securities. However, she also decided that the sale of XRP tokens to institutional investors could be considered a securities transaction.
Market reaction to legislation
Changing regulatory landscape is impacting XRP volatility. XRP price plummeted from an intraday high of $0.8468 to a four-week low of $0.4681. SEC‘s appeal has been made public. If the negative sentiment persists and the $0.4681 mark is breached, the next critical threshold will be the $0.4000 support level.
XRP/USD 1-day price chart (Source: CoinGecko)
Ripple Labs’ battle with the SEC continues, and investors, traders, and stakeholders want to know how this legal battle will affect XRP’s market dynamics. Ripple’s response will be eagerly awaited as the SEC files its interlocutory appeals. Ultimately, the consequences will almost certainly have far-reaching implications for the entire cryptocurrency sector.
SEC Secures Judge Approval for Interlocutory Appeal in Ripple Case This article first appeared on MetaNews.