SEC Requests Court to Grant Its Appeal in XRP Lawsuit
- The SEC has asked the court to grant its motion for interlocutory appeal in the XRP lawsuit.
- It argued that there are “knotty legal problems” surrounding the court’s application of the law in the lawsuit.
- Ripple’s legal team claims the SEC has not met the requirement for an appeal.
- The regulator seeks to “stay further proceedings until the resolution of that appeal.”
The United States Securities and Exchange Commission (SEC) has submitted a filing with the US District Court for the Southern District of New York, asking the judge to grant its appeal to the decision taken by Judge Analisa Torrens in the regulator’s lawsuit against American fintech firm Ripple over the sale of XRP tokens to investors in the US.
It is crucial to note that the judge ruled that the XRP token was not a security when sold to retail investors in the US but was a security when sold to institutions. Interestingly, the SEC has not been able to digest the partial win secured by Ripple in the lawsuit and recently argued that there are “knotty legal problems” surrounding the court’s application of the law.
The SEC claims that the legal issues need to be addressed once again, especially the Howey Test in the court filing. The regulator has asked the court to grant its motion for interlocutory appeal and “stay further proceedings until the resolution of that appeal,” while adding:
“The SEC respectfully requests certification for appellate review now because the issues raised by the Court’s order on summary judgment (D.E. 874) (‘Order’) present precisely the kinds of ‘knotty legal problems’ that led Congress to provide for interlocutory review.”
In the ruling, Judge Torres noted that XRP is not a security when sold via programmatic sales, including sales via crypto exchanges. However, the regulator has argued that the rulings on programmatic sales and other distributions present “legal questions” that warrant a review, and therefore, the agency’s appeal should be approved.
The SEC claims that there exists a legal gray area as to whether certain crypto assets fall under the classification of investment contracts via the Howey Test or not, as per previous cases.
“While interlocutory appeal should be the exception, not the rule, this is the unusual case where the Defendants themselves say that the issues have industry-wide significance and are of special consequence, and thus is precisely the type of case as to which the Second Circuit has invited interlocutory appeal.”
Interestingly, Ripple has rejected the SEC’s bid for appeal, as earlier reported by BitcoinWisdom.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
