Lawyers representing Ripple in its ongoing lawsuit against the United States Securities and Exchange Commission (SEC) have suggested that the regulatory agency has not fulfilled the necessary requirements for requesting an appeal.
In a filing dated September 1, submitted to the U.S. District Court for the Southern District of New York, Ripple’s legal team argued that the SEC’s grounds for seeking an appeal primarily revolved around its dissatisfaction with a judge’s ruling that determined the XRP token did not qualify as a security in sales to retail investors. The lawyers asserted that the case lacked the “exceptional circumstances required for interlocutory appeal” and urged the judge to reject any appeal request or request for a stay.
Ripple stated, “The SEC has not made any attempt to meet the criteria for a stay, even after the Individual Defendants pointed out this omission in their pre-motion letter. The Individual Defendants have separately voiced their opposition to the SEC’s request, and Ripple aligns itself with that opposition.”
In August, the SEC took steps to appeal and request a stay following a July court ruling by Judge Analisa Torres, which largely concluded that XRP did not meet the criteria of being a security according to SEC guidelines. During that time, the SEC argued that there were “significant grounds for differing interpretations” of the relevant laws.
The SEC initiated its lawsuit against Ripple, along with CEO Brad Garlinghouse and co-founder Chris Larsen, in December 2020, leading many cryptocurrency exchanges to delist XRP to avoid potential legal complications. After Judge Torres’ ruling, several of these exchanges announced their intentions to relist the token or explore the possibility of doing so in the future.
Brad Garlinghouse expressed his thoughts on the matter, stating, “It’s unfortunate that many members of the U.S. crypto community must resort to legal proceedings to demonstrate that the SEC’s actions are unwarranted and consistently at odds with both the facts and the law.” This statement was made in an X post on August 29th.
Throughout 2023, the SEC has been pursuing various cryptocurrency firms on allegations of securities violations, including Binance and Coinbase. On August 29th, asset manager Grayscale achieved a legal victory against the SEC after an appeal, which resulted in an order for a review of its application for a Bitcoin exchange-traded fund (ETF) with physical Bitcoin holdings.
The civil lawsuit between the SEC and Ripple remains ongoing, with Judge Torres proposing a jury trial for the case to commence in the second quarter of 2024.