SEC to seek appeal and stay in Ripple Labs court case

The United States Securities and Exchange Commission is moving to appeal a July court decision from its lawsuit against Ripple Labs, which had ruled the sale of XRP (XRP) is not a security when sold to retail investors.

In an Aug. 9 letter to Judge Analisa Torres — the presiding judge in the case — the SEC said it believed her decision warrants a fresh look by an appellate court.

It asked Judge Torres to put the case on hold during the appeal, saying there are multiple other pending court cases that could be affected depending on the appeal’s outcome. The SEC is currently in a legal battle with a number of crypto firms, including Binance and Coinbase, over alleged securities violations. 

“Interlocutory review is warranted here,” the SEC wrote, asking the ruling to be reviewed while the case is still pending. “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 added it seeks to certify the court’s decision that Ripple’s programmatic XRP offers and sales on crypto exchanges and individual sales were not securities.

AND… the SEC continues making questionable decisions, requesting an interlocutory appeal.

Note that it is NOT appealing whether XRP itself is a security – just its losses on the programmatic and individual sales issues. https://t.co/GziVLp23mT

— Jeremy Hogan (@attorneyjeremy1) August 9, 2023

The SEC also highlighted the judge’s decision in its suit against Terraform Labs who rejected Torres ruling, saying cryptocurrencies sold on exchanges could also be securities.

Related: CoinGecko now has an index for crypto tokens alleged as securities

The SEC’s letter comes nearly a month after Ripple scored a partial victory over the SEC regarding the securities status of XRP.

Torres ruled that the XRP token was not in itself a security. She said, however, that sales of XRP tokens can be securities in certain circumstances, such as when sold to institutional investors but not when sold on exchanges to retail traders.

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Additional reporting by Jesse Coghlan.