Following the denial of the SEC’s appeal request, attorneys discuss the Ripple case.

While many lawyers and commentators hailed the decision as a substantial victory for Ripple in its battle against the regulator, some legal experts are advising the public to temper their enthusiasm. Torres’ refusal of the SEC’s interlocutory appeal was based on her previous ruling, which partially favored Ripple. She argued that this did not warrant an order involving a “controlling question of law,” a crucial condition for approving an interlocutory appeal.

An interlocutory appeal is essentially an appeal made during an ongoing trial, in this case, the SEC’s proceedings against Ripple, its CEO Brad Garlinghouse, and executive chairman Christian Larsen. Bill Hughes, a lawyer at the blockchain firm ConsenSys, shared that he had expected the rejection of the SEC’s appeal. He explained that it’s uncommon for such an appeal to be granted at this stage of a trial.

Conversely, crypto lawyer Jeremy Hogan expressed greater confidence in labeling the decision as a “disaster” for the SEC, a viewpoint that Hughes contested. Hughes clarified, “The court specifies that [Torres’] ruling is specific to this case. Frankly, that’s acceptable for the SEC, unless they are overly concerned about one case not setting a precedent for the next one.”

Similarly, Gabriel Shapiro, the general counsel at Delphi Labs, cautioned crypto enthusiasts to moderate their excitement over the ruling, emphasizing that it wasn’t a complete loss for the SEC. In an October 3rd post on X (formerly Twitter), Shapiro explained that while the SEC’s motion for an appeal had been denied in this instance, the SEC still retained the option to appeal the case after the trial.

“It doesn’t imply that the SEC ‘lost its appeal’… it simply means that if the SEC chooses to appeal, it must address all aspects in a single appeal following the trial,” he clarified.

Nonetheless, as Scott Chamberlain, an entrepreneurial fellow at the ANU College of Law, pointed out, the decision could hold more significance for Ripple than some may acknowledge. Chamberlain contended, “Yes, the SEC can appeal later, but they are now saddled with a subpar factual record that makes a successful appeal significantly more challenging.”

Chamberlain further suggested that any future appeal from the SEC would likely be brought before the Supreme Court since there are no substantial legal questions left to resolve. What remains is the “arduous yet ultimately routine task of applying established law to a convoluted set of facts that do not support the SEC’s claim.”

“The law hasn’t changed. The SEC failed to substantiate its case. Now, if they wish to prevail, they must undertake a daunting endeavor,” Chamberlain summarized.

Ripple CEO Brad Garlinghouse also chimed in, expressing his optimism on social media. According to the latest court order, the trial is presently scheduled for April 23, 2024. Should the SEC seek to file an appeal, it will have to do so following the conclusion of the trial.