Ripple Labs bites back against SEC’s request to file appeal
Ripple Labs has voiced its opposition towards the United States securities regulator’s move towards filing an interlocutory appeal relating to the summary judgment laid down by U.S. District Court Judge Analisa Torres on Jul. 13.
In an Aug. 16 letter to Torres of the Southern District of New York, Ripple’s lawyers explained that because the Securities and Exchange Commission failed to satisfy elements of the Howey test relating to Ripple’s distribution of XRP — a “legal question” — the court should reject the SEC’s motion for leave to file an interlocutory appeal.
An interlocutory appeal occurs when a ruling by a trial court is appealed while other aspects of the case are still proceeding and are only allowed under specific circumstances.
Ripple’s lawyers believe it is more appropriate for the SEC to appeal the court’s ruling after a final judgement with a full record.
Ripple’s lawyers put forth three main arguments in its opposition against the SEC’s request. They first argued that an appeal requires a pure question of law and that the SEC’s request raises no new legal issues that need to be reviewed.
Secondly, the lawyers claim the SEC’s argument that the court ruled incorrectly on the matter is not sufficient, as the SEC must show that two courts are in clear conflict with each other over the subject issues, which isn’t the case here.
Thirdly, Ripple’s lawyers argued that an immediate appeal will not advance the termination litigation proceedings.
NEW: @Ripple files its response to the @SECGov’s anticipated interlocutory appeal.
The company, @bgarlinghouse and @chrislarsensf oppose the appeal on the following grounds:
1. The Court’s Order Does Not Involve a Controlling Question of Law.
2 The SEC Cannot Show a…
— Eleanor Terrett (@EleanorTerrett) August 16, 2023
Stuart Alderoty, Ripple’s chief legal officer, explained that no “extraordinary circumstance” exists in the matter that warrants the court to depart from normal legal procedure:
“There is no extraordinary circumstance here that would justify departing from the rule requiring all issues as to all parties to be resolved before an appeal.”
We oppose the SEC’s request for an interlocutory appeal. There is no extraordinary circumstance here that would justify departing from the rule requiring all issues as to all parties to be resolved before an appeal. https://t.co/hjNIwEZkSt
— Stuart Alderoty (@s_alderoty) August 16, 2023
Related: SEC v. Ripple: Judge greenlights investment banker declarant’s entry
On Jul. 13, Ripple scored a partial victory over the securities regulator regarding the securities status of XRP.
Torres ruled that the XRP token was not in itself a security. She said, however, that sales of XRP tokens can be securities in certain circumstances, such as when sold to institutional investors but not when sold on exchanges to retail traders.
Magazine: Crypto regulation: Does SEC Chair Gary Gensler have the final say?