Amid the ongoing debate regarding the SEC’s next move in the Ripple case, MetaLawMan predicted that the regulator would file an interlocutory appeal within two weeks.
Popular legal expert James Murphy (alias MetaLawMan) has predicted that the SEC would file an interlocutory appeal against Ripple within the next two weeks.
“I expect the SEC to file a request for interlocutory appeal within the next two weeks. I believe it would be in the best interests of Ripple & the #XRPCommunity for the appeals process to start now–rather than a year from now,” said MetaLawMan.
Bottom line:
I expect the SEC to file a request for interlocutory appeal within the next 2 weeks.
I believe it would be in the best interests of Ripple & the #XRPCommunity for the appeals process to start now–rather than a year from now.
And I like Ripple's chances on appeal.
— MetaLawMan (@MetaLawMan) July 25, 2023
The legal analyst made this known today while highlighting the SEC’s next actions in the Ripple case. It can be recalled that the crypto community has been debating on what step the SEC will take after it suffered a partial defeat against Ripple.
According to MetaLawMan, the SEC has four options to consider going forward. Interestingly, filing a request for an interlocutory appeal tops the list.
The prominent legal expert noted that the SEC has no unilateral right to appeal since Judge Torres has not issued the final judgment.
Consequently, MetaLawMan said the SEC would need permission from both District Judge Torres and the Second Circuit.
3 Elements SEC Needs to Show for an Appeal
Notably, the legal expert said the securities regulators must satisfy three essential criteria to get permission for an appeal. Firstly, the agency must show that the summary judgment involves a controlling question of law.
Secondly, it would argue that there is substantial ground for contrary opinions.
Lastly, the SEC must also show that an immediate appeal may materially advance the litigation.
To get permission for interlocutory appeal, the SEC would need to show that:
1. The ruling involves a controlling question of law;
2. There is substantial grounds for difference of opinion on that question; and
3. An immediate appeal may materially advance the litigation.
— MetaLawMan (@MetaLawMan) July 25, 2023
Interestingly, the expert speculated that the SEC would have a decent argument on all three elements.
No Deadline for an Appeal
While MetaLawMan noted that there is no deadline for any party to file an interlocutory appeal, he said such a request must be made promptly.
“[…] A rule of thumb is within 30 days,” he adds.
The legal expert added that if Judge Torres approves the SEC’s request for an appeal, the agency would have ten days to make a similar request to the Second Circuit.
Possible Moves For the SEC
Aside from filing an interlocutory appeal, the expert said the SEC’s next step could also be a settlement, a trial, or drop the case against Ripple execs- Brad Garlinghouse and Chris Larsen now.
Per the legal analyst, dropping the case against Ripple execs could give the regulatory agency the right to file an immediate appeal without requesting permission from Judge Torres or the Second Circuit.
Meanwhile, MetaLawMan does not think the SEC will settle at this point. He noted that the SEC would need to reverse Judge Torres’ decision to continue its regulation by enforcement program against crypto.
It bears mentioning that an interlocutory appeal is one filed before the court resolves every issue in the case.
Why SEC Will File an Interlocutory Appeal
According to the legal expert, the SEC could opt for an interlocutory appeal based on two major reasons. Firstly, he stressed that SEC Chair Gary Gensler is currently under pressure to get Judge Torres’ decision reversed.
Secondly, Judge Torres’ ruling in the Ripple lawsuit “looms like a dark cloud” over the SEC’s cases against top cryptocurrency exchanges like Binance, Coinbase, and Bittrex.
Recall that the SEC filed different lawsuits against the exchanges, alleging they violated federal laws via their support of crypto assets deemed as securities.
With Judge Torres declaring XRP as a non-security, crypto exchanges like Coinbase and Kraken that once halted support for the coin have re-listed it. Based on this, MetaLawMan asserted that the SEC is looking bad.
“Progressive Congressman Ritchie Torres and others have been emboldened to amp up criticism of Gensler. This is all embarrassing for Gensler and his allies,” he added.
The political considerations are important.
Crypto exchanges around the world are re-listing $XRP–making the SEC look bad.
Progressive Congressman Ritchie Torres & others have been emboldened to amp up criticism of Gensler.
This is all embarrassing for Gensler & his allies.
— MetaLawMan (@MetaLawMan) July 25, 2023
SEC Seeks to Review Court’s Ruling
As reported, the SEC did not get a total victory in its lawsuit against Ripple. Although the judge found that Ripple violated securities laws via its XRP sales to institutional clients, she ruled that the company’s programmatic sales on exchanges are not securities.
While the SEC was still reviewing part of the ruling that did not go in its favor, TerraForm Labs and its founder, Do Kwon, tried to use the ruling to dismiss the agency’s charges against them.
This prompted the SEC to declare that Judge Torres wrongfully decided Ripple’s sales to retail investors. Consequently, the securities regulator added that it is considering several options to review the ruling.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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