XRP is Not a Security Remains Law of the land as Ripple Execs Mock SEC on Its Latest Defeat

Ripple CEO Brad Garlinghouse has taken a fresh jibe at the US SEC after the court upheld an earlier ruling in favor of his company in an ongoing lawsuit.

Brad Garlinghouse, the CEO of San Francisco-based crypto company Ripple, has taken aim at the United States Securities and Exchange Commission (SEC) after a US district judge once again ruled in favor of his company.

On Tuesday, Judge Analisa Torres rejected the SEC’s interlocutory appeal to a July ruling that found that secondary XRP sales did not constitute securities transactions. Per the latest ruling, the SEC failed to provide a sufficient basis on which the court would have rescinded its earlier decision. 

The court also found some inconsistencies with the SEC’s arguments throughout the case. As a result, it mandated the agency to wait for other matters in the lawsuit to be ruled on before it can appeal any of the decisions.

Commenting on the most recent court verdict, Ripple CEO, who wears an XRP tattoo with the date of the July court ruling, mocked the SEC. While admitting he’s not a lawyer, the Ripple boss suggests that the SEC was beaten at its own game. The agency had requested the Judge to apply the famous “Howey test” in its case against Ripple, only to end up losing.

The SEC’s request to file an interlocutory appeal is DENIED. I’m not a lawyer but it seems the Court just told the SEC: You asked me to apply the “Howey” test, I did, and like it or not, you lost. https://t.co/0E4MS0iuRY pic.twitter.com/bkhCpum17n

— Brad Garlinghouse (@bgarlinghouse) October 4, 2023

Ripple’s Chief legal officer (CLO) said that the Court’s past July 13th ruling on XRP’s win remains, again confirming XRP is not security.

The Court’s July 13 ruling was, and remains, the law of the land. XRP is not a security. https://t.co/NxOXZZtSMG

— Stuart Alderoty (@s_alderoty) October 3, 2023

Court Finds SEC Arguments Lack of Substance

The latest court ruling waters down the SEC’s two-pronged argument. The agency had argued that programmatic sales of XRP could lead investors to expect profits based on Ripple’s effort and that Ripple’s other token distributions constituted an “investment of money” by recipients.

However, Judge Analisa Torres noted in her latest ruling that the SEC did not provide a substantial ground to refute the earlier findings in the July ruling. Additionally, the Judge ruled that such matters do not present pure questions of law that could easily be decided without extensively reviewing factual records.

The SEC must now wait for the court to rule on other matters related to its broader lawsuit against Ripple before it can file an appeal. As The Crypto Basic reported, the next hearing is scheduled for April 23, 2024, although the parties need to submit pre-trial documents by December 4, 2023.