Ripple Labs has firmly rebuffed the SEC’s endeavor to file an interlocutory appeal in response to the judgment delivered by U.S. District Court Judge Analisa Torres on July 13. Ripple’s Chief Legal Officer, Stuart Alderoty, asserted that no “extraordinary circumstance” exists to warrant the SEC’s appeal during the ongoing case.
Opposing the SEC’s Interlocutory Appeal
Ripple’s legal representatives meticulously outlined their opposition to the SEC’s bid. This was in a letter dated August 16 and addressed to Judge Torres of the Southern District of New York.
The attorneys contended that, since the SEC did not meet the criteria set forth in the Howey test concerning Ripple’s distribution practices—a crucial “legal question”—the court should dismiss the SEC’s motion to initiate an interlocutory appeal.
Interlocutory appeals are a legal recourse wherein a trial court’s decision is challenged while other facets of the case remain unresolved. Such appeals are only permissible under specific conditions.
Ripple’s legal team emphasized the appropriateness of adhering to the established legal procedure. They further suggested that an appeal should be considered subsequent to a final judgment with a comprehensive record.
Three Pronged Counterarguments
Ripple’s legal experts presented a tripartite counter to the SEC’s appeal request. Firstly, they argued that an appeal must be rooted in a pure question of law, and the SEC’s petition does not introduce any novel legal concerns warranting review.
Secondly, the legal representatives refuted the SEC’s assertion that the court’s prior judgment was erroneous. Ripple’s team emphasized that the SEC must demonstrate a clear conflict between two distinct courts on the subject matter. That is a criterion not met in this instance.
Thirdly, Ripple’s attorneys underscored that an immediate appeal would not expedite the finalization of the ongoing litigation proceedings.
Normalizing Legal Procedure
Stuart Alderoty, Ripple’s Chief Legal Officer, cogently articulated the stance. He asserted that the circumstances do not deviate from the established norm:
“In this matter, no extraordinary circumstance exists that would necessitate a departure from the rule mandating resolution of all issues pertaining to all parties before entertaining an appeal.”
July 13 Victory: Clarifying XRP’s Status
On a significant note, Ripple achieved a partial triumph over the SEC regarding the classification of XRP on July 13. Judge Torres ruled that the XRP token itself does not possess the attributes of a security.
However, she delineated certain conditions under which XRP token sales could be considered securities—specifically, when directed towards institutional investors. Notably, such classification does not apply when XRP tokens are traded on exchanges among retail traders.
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