Marc Fagel says the SEC had to appeal the Ripple ruling because the decision threatens its broader program against cryptocurrency exchanges like Binance.
Marc Fagel, a former official of the Securities and Exchange Commission, has revealed the major reason why the SEC requested permission to certify an interlocutory appeal in the Ripple case.
Binance Files Motion to Dismiss SEC Complaints
Earlier today, pro-XRP lawyer Bill Morgan reported that Binance has filed a memorandum of law in support of its motion to dismiss the SEC case.
The exchange’s lawyers highlighted the Ripple ruling as a legal precedent to push for the dismissal of the SEC’s complaint.
Notably, Binance argued that the U.S. District Court for the Southern District of New York, which presided over the Ripple case, found that Ripple’s programmatic sales of XRP were blind bid/ask transactions; thus, they do not constitute investment contracts.
Ripple Ruling Threatens SEC Program Against Exchanges
Commenting on the development, Attorney Morgan pointed out that the SEC foresaw other crypto-related companies like Binance, and Coinbase using the Ripple ruling to support their defense.
He asked whether Binance’s recent argument was the reason why the SEC sought an interlocutory appeal on Judge Torres’ decision.
In response, Fagel, an expert in securities litigation, answered in the affirmative.
“Yes, that’s why they had to appeal,” said Fagel.
According to Fagel, the SEC seeks to appeal the Ripple ruling because the decision threatens its broader program against exchanges.
He noted that the SEC could have tried to argue around the ruling if the concerns involved only issuers of securities-related assets and tokens.
Yes, that's why they had to appeal. If the concern were just other issuers of securities/tokens like Ripple, maybe the SEC could try to argue around it; but since the decision threatens its broader program against crypto exchanges, I could see why they'd take a run at an appeal.
— Marc Fagel (@Marc_Fagel) September 22, 2023
SEC Has Similar Concern
It is worth noting that the SEC shares a similar concern. In its effort to have its interlocutory appeal certified, the SEC argued that the court’s ruling on programmatic sales could substantially impact its pending litigations against crypto exchanges – Coinbase and Binance.
Interestingly, it did not take long before Binance referred to the Ripple ruling as a legal precedent to dismiss the SEC’s complaint.
The court has yet to issue a ruling on the SEC’s request to certify an interlocutory appeal.
Deaton Predicts Outcome of SEC Request
Meanwhile, crypto community enthusiasts have been speculating on the outcome of the ruling.
As reported earlier, Crypto-Law.US founder John Deaton speculated that the court would deny the SEC’s request to certify its interlocutory appeal.
Per Deaton, after the court denies the request, the regulator will have to wait until the end of next year to file a full appeal challenging the ruling.
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