In a recent legal twist, Ripple’s legal representatives retaliated against the United States Securities and Exchange Commission (SEC), calling the regulator’s appeal request in their continuing lawsuit invalid. Lawyers for the cryptocurrency startup have contended that the SEC’s request for an appeal falls short of the essential standards, adding to the legal wrangling.
Ripple’s legal team entered the fray on September 1st, underlining that the SEC’s desire for an appeal is primarily motivated by their discontent with a previous verdict. This court ruled that the XRP coin did not qualify as a security for retail investor sales, a finding with far-reaching industry consequences. Ripple’s legal team stressed the absence of the necessary criteria for an interlocutory appeal, urging the judge to deny the appeal request and any subsequent stay order.
“The SEC has not even attempted to meet the standard for a stay, even after the Individual Defendants identified that omission in their pre-motion letter,” Ripple said, adding that “the Individual Defendants write separately to oppose the SEC’s request.” Ripple has joined the resistance.”
The SEC has filed an appeal to overturn a July court decision by Judge Analisa Torres, who found that XRP was not a security under SEC criteria—the SEC argued at the time that there were important reasons for divergent interpretations of crucial legislation.
The SEC’s lawsuit against Ripple, its CEO Brad Garlinghouse, and co-founder Chris Larsen in December 2020 resulted in some exchanges delisting the XRP coin to avoid potential legal entanglements. Nonetheless, in the aftermath of Judge Torres’ decision, many of these exchanges stated their desire to relist the token or, at the very least, explore it shortly.
Reflecting on the situation, Garlinghouse stated, “It’s sad that so many in the US crypto community have to resort to the legal process to prove this SEC is out of control and consistently wrong on the facts and the law,” in a post shared on XRP’s platform on August 29th.
The SEC’s legal attention has not been limited to Ripple; this year, it has brought claims of securities breaches against several cryptocurrency firms, including industry titans such as Binance and Coinbase. On August 29th, asset management firm Grayscale significantly won against the SEC, adding to this legal environment. Following an appeal, a court ordered a review of Grayscale’s proposal for a $25,778 Bitcoin exchange-traded fund.
As the civil dispute between Ripple and the SEC continues, Judge Torres has proposed a jury trial, with hearings possibly beginning in the second quarter of 2024. The outcome of this legal dispute may transform the regulatory landscape for bitcoin offers and redefine their status under securities legislation.