Court tosses SEC’s appeal to undo Ripple XRP ruling
The United States Securities and Exchange Commission (SEC) has failed in its attempt to overturn a judge’s recent ruling on Ripple’s sales of its XRP cryptocurrency.
U.S. District Court Judge Analisa Torres, who previously ruled in July that Ripple’s sale of a cryptocurrency token to consumers wasn’t unregistered securities offering, determined that the SEC had not presented enough evidence to demonstrate flaws in the original decision. The SEC had sought to overturn the ruling before a final judgment is made in the case, which is expected next spring.
This development represents yet another minor victory for Ripple in its ongoing legal battle with the SEC. Ripple’s XRP token saw a 6.8% increase in value, reaching just over $0.54 before settling at $0.53 following the news. The SEC still has the option to appeal Judge Torres’ decision, but it can only do so after the case officially concludes, which is expected after a trial on remaining issues scheduled for next April.
The SEC initially sought permission to appeal Judge Torres’ rulings regarding the “programmatic” sales of XRP and its use as payment for services, arguing that an appeal would have implications for many lawsuits. However, Judge Torres did not find substantial grounds for a difference of opinion regarding her rulings and did not believe that an appeal would be important to advance the case toward resolution.
Ripple Labs opposed the U.S. securities regulator’s recent move to go for an interlocutory appeal about the summary judgment made by Judge Torres. Ripple’s lawyers explained that because the SEC didn’t meet the requirements of the Howey test in relation to Ripple’s distribution of XRP — a legal aspect — the court should say no to the SEC’s request to file an interlocutory appeal.
An interlocutory appeal occurs when a decision made by a trial court is appealed while other parts of the case are still ongoing. This type of appeal is allowed only under certain situations. As such, Ripple’s legal team believes it would be better for the SEC to seek an appeal after there’s a final judgment and a complete record in place.
The SEC’s appeal request follows its disagreement with the initial verdict, claiming that the court’s decision was “wrongly decided.” The agency argues that the ruling goes against “fundamental securities laws principles” such as the Howey test, which determines what falls under the category of an investment contract.