The US Securities and Exchange Commission (SEC) has penned a thorough letter to Judge Analisa Torres of the Southern District of New York, outlining reasons for its intent to pursue an interlocutory appeal against Ripple Labs Inc. This development, causing a stir in the XRP community, centers on the complex legal aspects of Ripple’s XRP sales and dispersals.
The core of the SEC’s argument centers on Ripple’s automated sales of XRP via cryptocurrency trading platforms and its other exchanges involving labour and services. The SEC asserts that these actions should be categorized as securities offer or sales, referencing the legal precedent of the Howey case.
According to the SEC’s letter, “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 labour and services did not involve the offer or sale of securities under SEC v. W.J. Howey Co., 328 U.S. 293 (1946).”
Going further into the document, the SEC highlights a situation where different legal opinions exist due to a ruling by Judge Jed Rakoff in the SEC vs. Terra case, creating a notable division within the district.
The letter states, “Interlocutory review is warranted here. These two issues involve controlling questions of law on which there is substantial ground for differences of opinion, as reflected by an intra-district split that has already developed.”
The SEC also points out that the court’s previous decision could have significant effects on many ongoing lawsuits.
According to the statement, “The Programmatic Sales and Other Distributions rulings concern issues that may arise in various pending cases, including many in this Circuit where the alleged investment contracts were offered and sold by issuers, like Ripple, on crypto asset trading platforms or for non-cash consideration.”
A legal stalwart in the XRP community named Jeremy Hogan commented, adding, “AND… the SEC continues making questionable decisions, requesting an interlocutory appeal. Note that it is NOT appealing whether XRP itself is security – just its losses on the programmatic and individual sales issues.”
Stuart Alderoty, Ripple’s Chief Legal Officer (CLO), explained that the SEC is in the early stages of asking the court for permission to appeal.
He added, “The SEC does not have the right to appeal just yet, which is why they are asking permission to file an interlocutory appeal. Ripple will file its response with the Court next week.”
XRP price
Even with complex legal actions and possible consequences, the market value of XRP has stayed quite steady. This indicates that the market is reacting calmly to the ongoing legal changes.
Currently, XRP has slightly increased and is being traded at $0.6378.