While Ripple recently objected to the SEC’s request for an interlocutory appeal, arguing that it was unjustified and did not advance the case in any meaningful way, the SEC responded that the complexity of the case did warrant a review. Ripple’s general counsel said it would have little impact and that the SEC continued to contradict itself.
SEC strikes back
New setback in the case pitting Ripple against the US Securities and Exchange Commission (SEC): the regulator claims that the latter does indeed require the intervention of the appeals court, in direct opposition to the recent motion filed by Ripple last week, which claimed the opposite.
Indeed, on 1 September, Ripple filed a document opposing the “certification of an interlocutory appeal”, and thus preventing the SEC from regaining control over the qualification of the XRP after Judge Analisa Toress ruled that the token could not be considered a security on the secondary market.
It is precisely the characterisation of XRP that will determine the outcome of this interminable trial, and at the same time will signal either defeat or victory for the crypto ecosystem against the US regulator.
Ripple had argued that the SEC’s request for an appeal was inadmissible for a number of reasons, including the fact that it did not prove “a substantial ground for difference of opinion” and that it did not “materially advance the end of the litigation”. To this, Gary Gensler’s SEC responded that Ripple itself considered the case to be preponderant, so an appeal was far from unwarranted:
“The defendants themselves say that the issues have industry-wide significance and are of particular importance. “
At the same time, the Securities and Exchange Commission said that the complexity of the case, which involves, among other things, the famous Howey test, necessitated a reconsideration of the matter. Ultimately, the SEC asked the court to uphold its request for an appeal and to “stay the proceedings pending resolution of this appeal”.
Ripple remains confident and blames SEC
According to Stuart Alderoty, Ripple’s General Counsel, the SEC’s request is unlikely to have much effect in reality, and would even contradict previous statements by the regulator:
Another SEC filing, another hypocritical pivot…
After years of its chairman saying the “rules are clear and must be obeyed” the SEC now cries that an appeal is urgently needed to resolve these “knotty legal problems.” https://t.co/ige4neIWRD
– Stuart Alderoty (@s_alderoty) September 8, 2023
“Another SEC filing, another hypocritical pivot… After years of its chairman declaring that “the rules are clear and must be followed,” the SEC is now screaming that an appeal is urgently needed to resolve these “thorny legal issues. “
Lawyer John Deaton also weighed in on X, adding that Ripple’s general counsel’s communication may seem brash at first, but it really only reflected the federal government’s view. Indeed, in Grayscale’s recently won case against the US regulator, the appeals court ruled that the regulator’s position had been “arbitrary and capricious”.
