US SEC Appeal’s Ripple Court Ruling That XRP Isn’t A Security

On Wednesday, August 9, the U.S. Securities and Exchange Commission (SEC) said that it’s planning to challenges the federal court ruling that the “programmatic” sales of XRP to retail players doesn’t constitute as securities.

However, during the last month’s Ripple ruling, US District Judge Analisa Torres said that the institutional sales of XRP would constitute as securities. The question of whether cryptocurrencies qualify as securities has been a significant issue for the industry for some time.

The industry has contended that it falls outside the jurisdiction of the SEC and similar regulatory bodies. The Ripple case is just one of many that have brought this matter before the courts, leading to differing rulings, as noted by the SEC.

On Wednesday, August 9, the US SEC submitted a meticulous letter to Judge Analisa Torres of the Southern District of New York, seeking an interlocutory appeal against Ripple Labs Inc. Well, the development has once again pushed the XRP community to the edge.

The SEC’s letter states, “Specifically, the SEC seeks to certify the Court’s holding that Defendants’ ‘Programmatic’ offers and sales to XRP buyers over crypto asset trading platforms and Ripple’s ‘Other Distributions’ in exchange for labor and services did not involve the offer or sale of securities under SEC v. W.J. Howey Co., 328 U.S. 293 (1946).”

Since Judge Torres's decision didn't bring the Ripple case to a close, the SEC must obtain her approval to pursue an immediate review by the appeals court. The SEC will need to convince the judge that the ruling raises a crucial legal question, presents a significant difference of opinion, and that an expedited appeal could hasten the legal proceedings.

Upon closer examination of the document, the SEC emphasizes an internal division within the district, highlighting significant differences in legal viewpoints. The letter highlights the need for an interlocutory review, asserting that these two matters encompass pivotal legal questions with substantial potential for differing opinions. This is evident from an emerging intra-district split on these issues.

Ripple’s General Counsel, Stuart Alderoty clarified about the SEC’s intent adding that the SEC is in the preliminary stage of seeking the court’s permission for the appeal. Alderoty added: “The SEC does not have the right to appeal just yet which is why they are asking permission to file an interlocutory appeal. Ripple will file its response with the Court next week.”