The U.S. Securities and Exchange Commission (SEC) has intensified its efforts to seek a mid-case appeal against Ripple, in the wake of the groundbreaking XRP ruling.
This legal dispute, which started off in December 2020, centres on the question of whether Ripple violated securities laws when it made XRP available to retail investors through various cryptocurrency exchanges. While the SEC has vehemently contended that XRP should be considered a security, subject to federal securities laws, Ripple has always argued otherwise.
Recently, Ripple filed a document arguing that the SEC had not presented a compelling argument to justify an appeal. However, the SEC’s response, filed on Friday, September 8, emphasized the significance of the case, with the agency stating that the issues raised by the recent ruling presented precisely the kinds of “knotty legal problems” that led Congress to provide for interlocutory review cases of the same nature.
“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” the SEC argued.
The SEC’s decision to appeal stems from Judge Analisa Torres’ ruling in the U.S. District Court for the Southern District of New York on July 13 where she found that while Ripple had indeed violated federal securities law in its sale of XRP to institutional, the company had no wrongdoing in relation to retail investors.
Meanwhile, in response to the latest SEC filing, Stuart Alderoty, Ripple’s Chief Legal Officer, expressed his perspective on the matter, saying;
“Another SEC filing, another hypocritical pivot… After years of its chairman saying the ‘rules are clear and must be obeyed,’ the SEC now cries that an appeal is urgently needed to resolve these ‘knotty legal problems.”
Alderoty’s statement highlights Ripple’s belief that the SEC’s position has been inconsistent, emphasizing the need for transparency and clarity in the regulatory approach toward the crypto sector.
That said, as the legal battle between Ripple and the SEC continues, the outcome of this appeal request now rests with Judge Analisa Torres. If she grants the SEC’s motion, the case will move to the Second Circuit Court of Appeals, where the broader crypto community will be eagerly watching to see how this landmark legal battle unfolds.