On July 13, 2023, Ripple received significant momentum following the ruling by U.S. Judge Analisa Torres, who determined that the company’s XRP token is not considered a security in the legal dispute with the Securities and Exchange Commission (SEC).
With the final ruling still pending and its potential impact on the cryptocurrency market as a whole, this case continues to attract significant attention in the digital asset space.
It’s essential to note that this ruling does not mark the end of the case but instead sets the stage for a series of related events. The temporary call by the SEC: As predicted, the SEC submitted a recommendation, requesting the U.S. District Court in the Southern District of New York to certify an interlocutory appeal. The agency argues that the case was “decided in error.” The SEC believes that opting for an interlocutory appeal rather than a regular appeal is necessary because they believe that resolving the appeals quickly for both rulings will enhance the court’s ability to comprehensively address all potential violations Ripple and its executives may be liable for.
The SEC’s legal representation asserts that these rulings could have a “significant persuasive effect” on various enforcement actions currently pending before the SEC, involving issuers offering and selling digital asset securities recklessly to retail investors on digital asset trading platforms, including cases pending in this district.”
Opposition to the Interlocutory Appeal: Ripple opposes the regulatory agency’s decision to pursue an interlocutory appeal, arguing that there are no significant legal issues at stake, and that an appeal would not expedite the overall case resolution. Ripple also claims that the SEC has not demonstrated that different judges would disagree with the rulings or that an interlocutory appeal would expedite the case. It’s important to note that interlocutory appeals are typically only allowed in specific circumstances. Ripple’s legal team suggests that the SEC should await the final ruling and full record before appealing.
However, the SEC has objected and requested that the court not consider Ripple’s opposition, citing complex legal issues related to the court’s interpretation of the law, particularly the Howey test, which must be carefully examined. The SEC has asked the court to approve its motion for an interlocutory appeal and “stay further proceedings until the appeal is resolved.”
Trial Date Against Ripple’s Executives: In addition to the Ripple lawsuit, the SEC has also initiated legal proceedings against the company’s top executives, including CEO Brad Garlinghouse and co-founder Chris Larsen. The presiding judge in this case has outlined plans to schedule a trial by jury to commence in the second quarter of 2024. She has requested both the prosecutor and defense attorneys to provide tentative trial dates, targeting a start date between April 1 and June 30, 2024.
Considering the highlighted events, both Ripple and the SEC are currently preparing for the second phase of the case, expected to provide comprehensive clarity on the status of XRP and its classification as a security in the cryptocurrency market. Meanwhile, the value of XRP remains closely tied to the case’s outcome.