In its interlocutory appeal certification request, the SEC officially concedes that digital assets, including XRP, are not inherently securities.
The United States Securities and Exchange Commission (SEC) has asked the U.S. District Court in the Southern District of New York (SDNY) to certify its interlocutory appeal in its legal battle with Ripple Labs.
Notably, the SEC made the request a day after Judge Analisa Torres, the judge overseeing the case, said the agency could proceed to file a motion for leave for an interlocutory appeal.
SEC Arguments
In its filing, the SEC stated that the interlocutory appeal would focus on Judge Torres’ ruling on Ripple’s programmatic sales of XRP and other distributions.
It bears mentioning that Judge Torres, in a July 13 order, ruled that both transactions are not securities. The SEC argued that an immediate appeal of these rulings is warranted because they involve “controlling questions of law as to which there are substantial grounds for difference of opinion.”
According to the SEC, another judge in SDNY has disagreed with Judge Torres’ ruling on Ripple’s programmatic sales. As reported, Judge Jed Rakoff, the judge overseeing the SEC v. Terra case, said the Howey test does not distinguish between institutional and retail buyers.
“Likewise, this Court’s ‘Other Distributions’ ruling departs from the holdings in numerous cases that an ‘investment of money’ under Howey can be met through a non-cash contribution such as the provision of goods or services,” the SEC added.
Furthermore, the SEC argued that the court’s ruling on Ripple’s programmatic sales and other distributions could substantially impact its pending litigations against top crypto exchanges, including Coinbase and Binance.
Notably, Ripple is expected to file its response to the SEC’s motion on September 1.
SEC Admits XRP Isn’t Security
In an exciting development, the regulatory agency admitted in the motion that digital assets themselves, including XRP, are not inherently securities.
“The SEC does not seek appellate review of any holding relating to the fact that the underlying assets here are nothing but computer code with no inherent value,” the agency said.
The SEC admitting that digital assets themselves are not inherently securities has stirred reactions from several crypto enthusiasts.
Deaton Reacts
Commenting on the development, Attorney John Deaton said the SEC conceded the issue due to the over 75K XRP holders who joined the lawsuit.
“We fought to have the judge actually [write] that the token itself is not the security. In fact, it was the first section in our argument in the Brief,” he added.
I have to say there is no doubt 75K #XRPHolders are a major reason the SEC is conceding this issue. We fought to have the judge actually ✍️ that the token itself is not the security. In fact, it was the first section in our argument in the Brief. https://t.co/ann7Hah7K3 pic.twitter.com/yqodFQ1eAV
— John E Deaton (@JohnEDeaton1) August 18, 2023
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