Judge Torres greenlights SEC’s request to file appeal in Ripple Labs dispute

The SEC has until Aug. 18 to file its interlocutory appeal

August 17, 2023 01:48 pm

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A federal judge has cleared the way for the Securities and Exchange Commission to file an appeal in its long-running legal fight with Ripple Labs.

Judge Analisa Torres granted the SEC’s motion for leave to file an interlocutory appeal on Thursday. According to new court documents, the SEC will file its motion by Aug. 18, giving Ripple Labs until Sept. 1 to file opposition papers.

The Thursday filing is not an approval of the appeal by Judge Torres — it simply allows the SEC to file its motion.

The order comes a day after Ripple Labs and co-defendants Brad Garlinghouse and Chris Larsen opposed the SEC’s request for an interlocutory appeal.

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In a Wednesday filing, Ripple Labs claimed that the SEC had failed to “meet its burden to present facts that would support stretching Howey to cover all of the Defendants’ distributions of the digital asset XRP.”

The distributed ledger tech firm accused the SEC of doing an “about-face” in a rush to “appeal what it claims…is a purely ‘legal question’ affecting all other digital-asset cases.”

The SEC, however, has claimed that the appeal would “avoid the possibility of engaging in protracted remedies” in litigation.

The appeal is focused on the judge’s decision on programmatic sales and “other distributions,” which included both the sale and offer of XRP in exchange for goods or services.

In July, Judge Torres ruled that the programmatic sales of XRP did not meet the standards of the Howey test, but the institutional sales did.

Outside of the appeal, there is an upcoming trial for the case. Garlinghouse and Larsen are expected to be tried in the Southern District of New York early next year. The two were charged with aiding and abetting securities laws violations in regards to Ripple’s XRP token, though Ripple Labs does not face the aiding and abetting charges.

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