The U.S. Securities and Exchange Commission (SEC) has taken steps to file an interlocutory appeal against Ripple, as part of its ongoing legal battle with the cryptocurrency firm. This move follows earlier rulings by Judge Analisa Torres in the Southern District of New York, which stated that Ripple’s exchange sales of XRP and its distributions of XRP as payment for services were not securities.
Although the SEC intends to appeal these results, it does not plan to appeal a separate ruling that determined Ripple’s institutional XRP sales satisfied the Howey test, which determines if an offer is an investment contract. The SEC acknowledged that the court correctly determined this fact in its latest filing.
On August 9, the SEC laid out its basis for appealing the two unfavorable results. Ripple, however, attempted to prevent the appeal on August 16 but was unsuccessful. The SEC was granted court permission to file its motion on August 17, but it is unclear if the regulator will immediately submit another filing toward its appeal.
The SEC’s appeal focuses on the differences between the rulings in the Ripple case and a similar case against Terraform Labs in the same district. It argues that the appeal is justified as the rulings involve controlling questions of law and there is a substantial difference of opinion. The regulator also suggests that an immediate appeal will help bring the Ripple case to its final conclusion, as the court will need time to determine remedies for Ripple through discovery and legal briefing. Furthermore, the SEC claims that an immediate appeal is necessary as the court’s decision has implications for other ongoing SEC cases.
It remains to be seen how the appeal will unfold, but it is clear that the SEC is determined to challenge the earlier victories for Ripple. This ongoing legal battle will continue to impact the cryptocurrency industry and the broader issue of whether digital assets should be classified as securities.
