Ripple Pushes Back Against SEC in Ongoing Legal Battle

In the latest development of the ongoing legal battle between the U.S. Securities and Exchange Commission (SEC) and cryptocurrency firm Ripple, Ripple has filed an opposition to the SEC’s anticipated motion for leave to file an interlocutory appeal. This move comes shortly after the SEC sought permission to appeal certain aspects of the court’s recent ruling in the case.

The court ruling, delivered by Judge Torres, recently clarified the status of XRP transactions and whether they were in violation of securities laws. The court held that sales of XRP to the public through exchanges or trading algorithms (known as “programmatic sales”) did not violate U.S. securities laws. Similarly, other distributions of XRP, including compensation to employees and grants to developers within the Ripple ecosystem, were found not to fall under the definition of securities.

Ripple’s opposition to the SEC’s appeal request centers on several key points:

1. Pure Question of Law: Ripple argues that an interlocutory appeal is unwarranted, emphasizing that the SEC’s presented questions require a review of the court’s application of the law to specific factual circumstances. Such cases, according to Ripple, do not constitute “pure questions of law” suitable for interlocutory review.
2. Difference of Opinion: Ripple challenges the SEC’s assertion of a substantial difference of opinion among courts, pointing out that the differences cited by the SEC are based on fact-specific inquiries rather than an underlying legal rule. Ripple maintains that the SEC’s position lacks the necessary foundation to justify an interlocutory appeal.
3. Effect on Litigation Termination: Ripple highlights that an interlocutory appeal, even if granted, would not bring about the termination of the litigation. Instead, it could lead to further rounds of legal proceedings, including remedies and damages phases, which would result in a protracted legal process.

Ripple’s opposition contends that the SEC’s attempt to expedite the appeal process is based on an alleged misrepresentation of the case’s legal nature. Ripple emphasizes that the SEC’s proposed questions for appeal would require a reexamination of the factual record and application of legal standards.

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As the legal saga between Ripple and the SEC continues, the outcome of this opposition will determine whether the interlocutory appeal proceeds, potentially shedding light on critical aspects of the classification of XRP transactions and their alignment with securities laws. The case remains a significant focal point in the evolving regulatory landscape of the cryptocurrency industry.