Ripple Labs is standing up against a recent move by the U.S. securities regulator to appeal a decision made by U.S. District Court Judge Analisa Torres on July 13. The judge’s decision was about the summary judgment in the case, and Ripple is not happy with the regulator’s attempt to challenge it through an interlocutory appeal.
In a letter dated August 16, Ripple’s legal team explained their disagreement to Judge Torres in New York. They pointed out that the Securities and Exchange Commission (SEC) did not meet certain requirements of the Howey test related to Ripple’s distribution of XRP. This test is important in determining whether XRP should be considered a security or not. Because of this failure, Ripple’s legal team argued that the court should reject the SEC’s request for permission to file an interlocutory appeal.
An interlocutory appeal is when a decision from the trial court is appealed while other parts of the case are still ongoing. It’s allowed only under specific conditions.
Ripple’s lawyers believe that it would make more sense for the SEC to appeal after a final judgment has been made, supported by a complete record of the case. They presented three main reasons to counter the SEC’s request. Firstly, they said that an appeal should focus on a clear legal question, and the SEC’s submission didn’t introduce any new legal issues that require examination. Secondly, Ripple’s legal team argued that the SEC’s claim that the court’s decision was wrong is not enough to justify an appeal. For an appeal to be warranted, the SEC should show a significant disagreement between two courts on important matters, which isn’t the situation here.
Lastly, Ripple’s lawyers expressed the view that an immediate appeal wouldn’t speed up the end of the legal proceedings.
Stuart Alderoty, Ripple’s Chief Legal Officer, emphasized that there’s no exceptional circumstance to justify a departure from the standard legal process:
“In this matter, there is no extraordinary circumstance that would justify departing from the rule requiring all issues as to all parties to be resolved before an appeal.”
It’s worth mentioning that on July 13, Ripple had a partial victory in its legal battle against the SEC’s classification of XRP as a security. Judge Torres ruled that the XRP token itself isn’t a security. However, she pointed out that the sale of XRP tokens could be seen as securities in specific situations, like when they are sold to institutional investors, but not when they are traded on exchanges for regular retail traders.