SEC says recent Ripple ruling could have ‘substantial impact’ on other court cases

Ripple Labs and defendants have until Sept. 1 to file a response

article-image

Mark Van Scyoc/Shutterstock modified by Blockworks

share

The US Securities and Exchange Commission has filed a motion to leave to file for an interlocutory appeal in its lawsuit against Ripple Labs.

The SEC argued that an interlocutory appeal in place of a traditional appeal is necessary because “immediate appellate resolution of the two rulings makes it more likely that this Court will be able to assess in one proceeding the remedies for all of the violations for which Defendants are ultimately held liable.”

Lawyers for the SEC claimed that the rulings could have a “substantial impact on a large number of pending litigations.” The SEC currently has open cases concerning securities laws against Coinbase and Binance, to name a few.

“The Programmatic Sales ruling could have significant persuasive value in various pending SEC enforcement actions where issuers offered and sold crypto assets indiscriminately to public investors over crypto asset trading platforms, including cases pending in this district,” the SEC said.

Today’s filing argues that the Second Circuit Court of Appeals — which will oversee the interlocutory appeal if it is allowed to move forward — has previously overseen similar appeals to “resolve important questions of securities law.” 

In addition, the SEC has asked the court to stay proceedings pending the motion and “any forthcoming appeal.”

The SEC further argues that a “Second Circuit reversal vis-à-vis the XRP offers and sales on which the Order granted Defendants summary judgment could increase the likelihood of resolving ‘this litigation through settlement.’” This would therefore advance the termination of the case, while possibly preventing multiple trials.

Ripple Labs has until Sept. 1 to file opposition papers.

The filing comes after Judge Analisa Torres cleared a hurdle on Thursday for the SEC to request a motion to leave to file an appeal. She did not, however, approve the appeal. 

Earlier this week, Ripple Labs and co-defendants Brad Garlinghouse and Chris Larsen opposed the SEC’s request for an interlocutory appeal.

Lawyers for the defendants argued that the SEC had not met the “burden” required for it to “present facts that would support stretching [the Howey test] to cover all of the Defendants’ distributions of the digital asset XRP.”

The lawyers for the defendants also accused the SEC of performing an “about-face” to rush an appeal because it claims it’s going after “what it claims […] is a purely ‘legal question’ affecting all other digital-asset cases.” 

The defendants said in their Wednesday filing that they don’t oppose the SEC appealing “the Court’s decision in the normal course after a final judgment with a full record.”

In seeking an interlocutory appeal, the SEC is focusing on the judge’s decision on programmatic sales and “other distributions” which included 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 all of the Howey test’s criteria. However, the institutional sales did meet Howey standards. 

The court noted that “having considered the economic reality of the Programmatic Sales, the Court concludes that the undisputed record does not establish the third Howey prong.”

Additionally, Garlinghouse and Larsen face an upcoming jury trial next spring centered around charges claiming that the two aided and abetted securities laws violations in regard to the XRP token. Ripple Labs itself does not face aiding and abetting charges.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

recent research

Research Report Templates.png

Research

An overview of the Base Ecosystem, with a focus on market leaders.

article-image

Although bitcoin hitting $120k by year’s end is looking unlikely

article-image

About 270 million HYPE has been claimed, valued around $7.6 billion

article-image

Stanford professors David Mazières and Dan Boneh will lead the lab alongside a cohort of graduate student researchers

article-image

With more companies holding BTC, bitcoin yielding strategies could become “a new corporate finance norm,” CoinShares posed

article-image

The proposal comes after Polygon governance considered a controversial use of bridged liquidity for yield

article-image

Can the community balance its decentralized ethos with the need for inclusivity and constructive debate?