Ripple Responds to SEC Appeal Request
Ripple Labs has recently taken a stance against the Securities and Exchange Commission's (SEC) appeal request from last week. Ripple's Chief Legal Officer, Stuart Alderoty, posted on Twitter (now X), stating:
"We oppose the SEC's appeal request. There is no specific reason here to do so before resolving all relevant issues."
As reported by Coin68, Ripple has been embroiled in a legal battle with the SEC since 2020. At that time, the agency accused Ripple of conducting a $1.3 billion XRP sale, which it deemed as securities under its jurisdiction, and charged Ripple CEO Brad Garlinghouse and co-founder Chris Larsen.
It was not until July 2023 that Judge Analisa Torres ruled that XRP is not an investment contract. The judge determined that XRP functions as a security in transactions between Ripple and institutional investors, but transactions involving individual investors through exchange order books are exempt.
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
This move caused a sharp rise in XRP prices, "resurrecting" the entire market within a short period. Moreover, it set a legal precedent for other crypto projects facing SEC accusations of being securities to mount a stronger defense against the commission. Subsequently, many crypto exchanges reinstated XRP listings.
In a court filing on August 9, the SEC representatives indicated plans to reverse the situation and file an appeal. The SEC referenced another lawsuit involving Terraform Labs, the organization behind the historic collapse of LUNA-UST in May 2022.
Judge Jed Rakoff, overseeing this case, suggested that the approach to the Ripple lawsuit could undermine part or all of the lawsuit against Terraform Labs. Rakoff does not differentiate cryptos based on how they are sold; whether directly to large investors, institutions, or through third parties to retail investors—does not prove whether a token qualifies as a security.
These are separate lawsuits, and Judge Rakoff's rulings cannot reverse the Ripple case's precedent, but they could potentially disadvantage Ripple in the future.
In conclusion, proceeding with the SEC appeal requires approval from the Southern District Court of New York (USA) and the appellate court. Afterward, the Court of Appeals would review the SEC's appeal.
Furthermore, Ripple Labs is also considering extending the timeline, anticipating favorable crypto legislation from the U.S. Congress or until a new U.S. president takes office.
