Regulatory Agency SEC to File Intermediary Appeal on Ripple’s Ruling

SEC to appeal Ripple's ruling.

Author: Nikhilesh De, CoinDesk; Translation: Song Xue, LianGuai

The US Securities and Exchange Commission (SEC) said in a court filing on Wednesday that it will file an “intermediate appeal” against the judge’s ruling on Ripple’s programmatic sale of XRP.

The SEC said it is seeking permission to appeal certain parts of the recent ruling, while the rest of the SEC case will proceed to trial. The regulatory agency said that granting an intermediate appeal would avoid a second trial for the SEC and the government.

“Specifically, the SEC seeks to prove to the court that the defendants’ ‘programmatic’ quoting and selling of XRP to XRP buyers through cryptocurrency trading platforms, as well as Ripple’s ‘other distributions’ in exchange for labor and services, do not involve securities offerings or sales under the Howey test,” the SEC’s filing stated.

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A federal judge ruled last month that while Ripple’s direct sale of XRP to institutional investors violated securities laws, the programmatic sale to retail investors through exchanges did not violate securities laws.

US District Court Judge Analisa Torres had previously scheduled a judgment motion in the second quarter of 2024 to address other issues, but she did not make a ruling.

The SEC noted in its filing that Ripple must respond by August 16, 2023 (one week after the filing) and proposed to submit an opening brief listing the appeal on August 18. Ripple will have two weeks to respond. If the judge approves the filing, the SEC will have another week to reply to Ripple.

The SEC had previously hinted at potentially appealing the ruling in another case, as the agency’s lawyers urged Judge Jed Rakoff of the same court to disregard the ruling while he was considering Terraform Labs’ motion to dismiss the SEC lawsuit. Rakoff later denied the motion to dismiss and rejected Torres’ ruling on the programmatic sale during this process.

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