Ripple Labs opposes ‘gambit’ appeal request by the SEC

Ripple Labs argued that the SEC doesn’t meet the standards necessary to move forward with an interlocutory appeal


Jievani/Shutterstock modified by Blockworks


The US Securities and Exchange Commission is seeking to file an appeal in its legal battle against Ripple Labs, and now the distributed ledger tech firm, along with CEO Brad Garlinghouse and former CEO Christian Larsen — both of whom are also listed as defendants — have responded in court.

Lawyers for Ripple Labs wrote in a letter that the SEC only filed the interlocutory appeal request last week as an “about face” because of its strategy to regulate the digital asset sector by enforcement. 

“Having 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 SEC now does an about-face and rushes to appeal what it claims…is a purely ‘legal question’ affecting all other digital-asset cases,” Ripple Labs and the other defendants wrote to Judge Analisa Torres.

In its request for an interlocutory appeal, the SEC claimed that the appeal — if allowed to progress — would “avoid the possibility of engaging in protracted remedies” in litigation.

The SEC cited the ongoing cases, though it did not name a specific one, saying that issues could arise from the initial Ripple Labs ruling in “various pending cases, including many in this Circuit where the alleged investment contracts were offered and sold by issuers — like Ripple — on crypto asset trading platforms or for non-cash consideration.”

In July, Judge Torres ruled that XRP was not a security when used in “programmatic” sales. However, Torres wrote that it did meet the standards of the Howey test in the context of institutional sales.

In its filing, the SEC said it sought to appeal the judge’s decision on programmatic sales and “other distributions,” which included the sale and offer of XRP in exchange for goods or services.

“The Court’s holdings that Defendants’ “Programmatic Sales,” as well as Ripple’s “Other Distributions,” were not the offer or sale of an investment contract applied Howey’s legal standard to an extensive factual record,” defendants wrote Wednesday.

Read more: Ripple Labs v. SEC jury trial is set for spring 2024

Ripple Labs argued that the SEC doesn’t meet the standards necessary to move forward with an interlocutory appeal, specifically saying that the regulatory body doesn’t have enough to show “a substantial ground for difference of opinion.”

And, despite the SEC claiming that the court reached the “wrong result in applying that test,” it “does not show any difference of opinion about an underlying legal rule.”

However, Ripple Labs says that the SEC is welcome to pursue an appeal “in the normal course after a final judgment with a full record.”

Updated Aug. 16, 2023 at 5:55 pm ET: Listed Brad Garlinghouse and Christian Larsen as co-defendants.

Updated Aug. 16, 2023 at 5:45 pm ET: Added additional context throughout.

Don’t miss the next big story – join our free daily newsletter.


Upcoming Events

MON - WED, MARCH 18 - 20, 2024

Digital Asset Summit (DAS) is returning March 2024. What you can expect: And more! Don’t miss out on the opportunity to be in the room when the future of crypto is decided. Join us and help shape the future of our […]

recent research

Research report - cover graphics-2.jpg


Base has doubled-down on its commitment to the Superchain vision, has shown early signs of success with nearly $400M in TVL, and has become home to novel dapps such as which has seen significant traction.


The bitcoin halving slated for April 2024 — an event expected to spur upward price action for BTC — could be a boon for Block’s stock price, analysts say


Seed Club founder Jess Sloss is excited to “open the doors and let other people see what we’ve been seeing for the last few months”


Blockchain is a “natural fit” in games based on open economies and user-generated content, says Wyatt


Their current stance is a half-baked attempt that could stifle innovation and burden an emerging industry


Maker’s DeFi-focused “subDAO” passed a proposal activating a lending market for DAI on the Gnosis Chain


Certain creditors could be repaid sooner, with one hedge fund exec telling Blockworks it expects a payout by the end of the year