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(Kitco News) –
The U.S. Securities and Exchange Commission (SEC) can file an interlocutory appeal in its case against Ripple Labs, opening the door to the possibility that the recent ruling that XRP is not a security could eventually be overturned.
On Thursday afternoon, Federal Judge Analisa Torres granted the request from the SEC after the securities regulator sent a letter to Torres on Aug. 9 arguing that her July decision that XRP is not a security per se could affect multiple pending court cases. An interlocutory appeal happens when a ruling by a trial court is appealed while other aspects of the case are still ongoing.
The SEC request referenced the recent decision in its case against Terraform Labs in which the presiding over denied Terraform’s request for dismissal that cited Torres’ XRP decision, saying he did not agree with the ruling that XRP is not a security.
Today’s decision means the SEC has until tomorrow to submit its motion to the U.S. Court of Appeals for the Second Circuit. Ripple then has until Sept. 1 to file its response to the motion, which the SEC can respond to by Sept. 8. If the SEC wins its motion, the regulator can then file the full appeal of the court ruling.
Today’s ruling came less than a day after Ripple Labs submitted a letter expressing their opposition to any potential appeal in the case. Ripple’s lawyers argued that an interlocutory appeal “requires a pure question of law that the reviewing court could decide quickly and cleanly without having to study the record,” which they said was absent; that the SEC “cannot show a substantial ground for difference of opinion” and “must do more than just ‘claim that the court’s ruling was wrong’”; and that interlocutory appeal is “unwarranted” where reversal would not “terminate the litigation.”
Ripple’s General Counsel Stu Alderoty said in an interview with Real Vision shortly after today’s ruling that the company remains confident they will win regardless.
“We’re not afraid of an appeal. We think we would win on an appeal…but let’s get there on an ordinary course,” he said. “Let’s stop bending the rules to accommodate the SEC’s strategy of regulation by enforcement.”
On Aug. 9, Torres submitted a filing detailing plans to move forward to a jury trial for the remaining charges against Ripple, its CEO Brad Garlinghouse, and co-founder Chris Larsen. The Securities and Exchange Commission’s (SEC) lawsuit against Ripple Labs is set to advance to a jury trial in the second quarter of 2024.
On July 13, Judge Torres issued summary judgments on several aspects of the SEC vs. Ripple Labs case, including ruling that XRP was not a security by definition, but summary judgments for certain charges against the company, Garlinghouse, and Larsen were not approved, advancing those charges to a full trial.
Lawyers for the SEC and Ripple have until Aug. 23 to submit blackout dates for the trial, which is expected to start between April 1 and June 30, 2024.
The SEC initially filed its lawsuit against Ripple, Garlinghouse, and Larsen in December 2020. This led to the XRP token being delisted from many exchanges that served U.S. customers, including Coinbase, Kraken, and Gemini.
The price of XRP fell in the wake of the announcement, dropping from $0.5847 to session lows of $0.5719, before recovering to trade at $0.5755 at the time of writing.
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