The Securities and Exchange Commission wants to appeal Judge Torres’ decision on Ripple’s programmatic sales of XRP, while XRP’s non-security status remains unchallenged.
The United States Securities and Exchange Commission (SEC) has requested permission to appeal Judge Analisa Torres’ ruling on Ripple’s programmatic sales of XRP and the company’s other distribution.
Seasoned lawyer James K. Filan shared the development yesterday on X.
#XRPCommunity #SECGov v. #Ripple #XRP BREAKING: SEC Files Letter outlining its basis for filing a Motion for Leave to File an Interlocutory Appeal regarding “Programmatic” offers and sales to XRP buyers over trading platforms and Ripple’s “Other Distributions.”…
— James K. Filan 🇺🇸🇮🇪 (@FilanLaw) August 9, 2023
Judge Torres’ SEC v. Ripple Ruling
For context, Judge Torres issued the much-anticipated summary judgment decision in the SEC v. Ripple lawsuit last month. In the ruling, the federal judge ruled that Ripple’s past sales to institutional investors constitute securities offering.
However, she found that Ripple’s programmatic sales on digital exchanges and other distributions are not securities. In addition, the court also ruled that XRP itself is not a security.
The SEC had been signaling plans to appeal the decision following the verdict. Most recently, the regulatory agency officially requested permission for an interlocutory appeal.
SEC Requests to File Appeal
Notably, the SEC’s requested interlocutory appeal seeks to review Judge Torres’ decision on Ripple’s programmatic sales of XRP on exchanges and the company’s other distribution, especially XRP distribution to employees.
Interestingly, the SEC is not seeking to challenge Judge Torres’ decision, stating that XRP is not a security.
“Specifically, the SEC seeks to certify the Court’s holding that Defendants’ ‘Programmatic’ offers and sales to XRP buyers over crypto asset trading platforms and Ripple’s ‘Other Distributions’ in exchange for labor and services did not involve the offer or sale of securities under [the Howey test],” the SEC filing said.
In its latest filing, the SEC stated that Ripple would have to respond to the request on August 16, 2023. The SEC also proposed filing an opening brief laying out the appeal on August 18.
Furthermore, the SEC noted that Ripple must file an opposition on or before September 1, 2023 (two weeks from the agency’s opening brief filing). In addition, the SEC’s reply is due seven days on September 8, 2023.
Ripple has reacted to the SEC’s appeal request, stating it will file its response by next week.
SEC Cannot Challenge XRP’s Non-Security Status
It bears mentioning that there has been confusion about the SEC’s appeal request. Some cryptocurrency community members argue that the SEC intends to appeal all the aspects of the case Ripple won, including Judge Torres’ decision that XRP itself is not a security.
However, top XRP enthusiasts like Blockchain Backer have taken to X to clarify the SEC’s recent filing. Blockchain Backer emphasized that the regulator would not challenge the XRP non-security status ruling.
JUST IN: SEC DOES NOT APPEAL SECURITY STATUS OF DIGITAL ASSET “$XRP”
XRP’S NON-SECURITY STATUS RULING AT SUMMARY JUDGEMENT REMAINS UNCHALLENGED
Ripple, the company, has its programmatic sales challenged https://t.co/I4giubBdno
— Blockchain Backer (@BCBacker) August 9, 2023
In response, prominent XRP influencer Sherrie said, “the SEC cannot appeal XRP’s non-security status.”