Ripple objects to SEC’s use of Terra ruling to warrant appeal

abdelaziz Fathi

Ripple has argued in a recent filing that the U.S. Securities and Exchange Commission (SEC) hasn’t presented a strong enough case to warrant an appeals court intervention in their ongoing legal dispute.

Ripple Labs has opposed the U.S. securities regulator’s recent move to go for an interlocutory appeal about the summary judgment made by U.S. District Court Judge Analisa Torres.

The SEC is seeking approval from a federal judge to appeal her ruling, which found that Ripple’s sales of XRP did not violate securities law. If approved, the SEC would need to convince the Second Circuit Court of Appeals to take up the case.

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.

In their filing, Ripple contends that there are no significant legal questions at hand and that an appeal wouldn’t expedite the overall case resolution. Ripple added that the SEC hasn’t proven that different judges would disagree with the ruling or that an appeal would lead to a quicker conclusion of the case, all of which are prerequisites for the judge to grant an appeal.

In July’s ruling, Judge Analisa Torres found that Ripple had violated federal securities laws in selling XRP to institutional investors but not in making it available to retail investors on exchanges. Ripple argues that the factual basis for each case is different, leading to varying rulings. The SEC has until September 8 to respond to Ripple’s filing.

“This Court’s summary-judgment ruling relied on record evidence that Ripple made no ‘promises or offers’ to purchasers in Programmatic Sales. Terraform, by contrast, accepted the SEC’s allegations that Terraform and its founder promised all purchasers – those who bought directly from Terraform or from some other source – ‘rates of returns of 19-20% on the coin owners’ initial investment,” the filing reads.

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 move comes after U.S. District Judge Analisa Torres issued a somewhat divided ruling, stating that certain programmatic sales of XRP didn’t violate securities laws, while direct sales to institutions did fall under securities laws.

Read this next

Digital Assets

Bybit exits UK market ahead of regulatory changes

Bybit is suspending its cryptocurrency services for users in the United Kingdom due to impending regulations from the country’s Financial Conduct Authority (FCA).

Digital Assets

Binance argues SEC trampled authority set by Congress

Binance, Binance.US, and Changpeng Zhao have jointly filed to dismiss a lawsuit brought by the Securities and Exchange Commission (SEC) in June.


Oscar Asly replaces Rasha Gad as CEO of M4Markets Dubai

Seychelles-regulated brokerage firm M4Markets has secured a license from the Dubai Financial Services Authority (DFSA) after it has already incorporated its new subsidiary in the Dubai International Financial Center (DIFC).

Retail FX

Capital Index UK reports mitigated loss despite revenue drop

FCA-regulated brokerage firm Capital Index (UK) Limited has released its annual financial report for the year 2022.

Digital Assets

Mike Novogratz’s Galaxy Digital expands in Europe

Galaxy Digital, the New York-based cryptocurrency financial services company founded by Mike Novogratz, is expanding its presence in Europe by appointing Leon Marshall as its first European CEO.

Metaverse Gaming NFT

Turingum Partners with MarketAcross to Drive Web3 Adoption in Global and Japanese Markets

Global blockchain PR leader MarketAcross joins forces with Japanese Web3 specialist Turingum to mutually expand its market reach, aiming to fortify Turingum’s worldwide footprint and MarketAcross’s presence in the lucrative Japanese blockchain landscape.

Digital Assets

Binance to delist all stablecoins in Europe next year

During a public hearing with the European Banking Authority (EBA), an executive from Binance said that the exchange could ultimately delist stablecoins from its European platforms by June 30, 2024.

Industry News

“Unconscionable conduct”: ASIC fines National Australia Bank $2.1m for overcharging customers

NAB faces a $2.1 million penalty for unconscionable conduct, as the Federal Court rules the bank knowingly overcharged customers, and took over two years to rectify the situation.