Ripple Labs has spoken out against the U.S. securities regulator’s recent move to file an appeal concerning the verdict provided by U.S. District Court Judge Analisa Torres on July 13.
Stuart Alderoty, Ripple’s Chief Legal Officer, firmly stated that the case lacks any “extraordinary circumstance” to warrant the court’s acceptance of the Securities and Exchange Commission (SEC)’s appeal request.
The backdrop to this was an August 16 letter sent to Judge Torres of the Southern District of New York. In it, Ripple’s legal team clarified that since the SEC did not meet specific criteria of the Howey test related to Ripple’s XRP distribution – a crucial legal point – the court should deny the SEC’s motion for an interlocutory appeal.
It’s essential to note what an interlocutory appeal entails: it’s when a decision made by a trial court is challenged, even while other parts of the case continue. Such appeals are permitted only under particular conditions.
Ripple’s legal team proposed that it would be more suitable for the SEC to challenge the court’s decision after the case concludes, backed by a complete record.
Ripple’s lawyers presented three central arguments to counter the SEC’s appeal request:
An appeal should hinge on a purely legal question. The SEC’s appeal doesn’t present any fresh legal queries requiring examination. Merely arguing that the court made an incorrect decision isn’t enough. To make a solid case, the SEC must demonstrate a clear conflict between two courts on the issue at hand – a situation that doesn’t exist here. Immediate appeals won’t facilitate the resolution of litigation proceedings. Reflecting on the situation, Alderoty emphasized that the court shouldn’t stray from standard legal processes, given the absence of any exceptional circumstances in this case.
To recap the context, Ripple enjoyed a partial triumph over the SEC on July 13 regarding XRP’s securities status. Judge Torres determined that XRP, as a token, wasn’t a security. However, she pointed out that XRP token sales could be considered securities in specific contexts, such as when directed at institutional investors, but not for sales to everyday traders on exchanges.