The SEC’s Motive Behind Seeking Interlocutory Appeal in Ripple Lawsuit
In a recent discussion, Marc Fagel, a former SEC Regional Director and current Stanford Law School Lecturer, shed light on the SEC’s decision to pursue an interlocutory appeal in the Ripple lawsuit. Fagel believes that the SEC’s move is aimed at protecting its broader regulatory efforts against cryptocurrency exchanges like Binance.
Binance Supports Motion to Dismiss SEC Lawsuit
On the same day, lawyer Bill Morgan, who closely follows the SEC v. Ripple lawsuit, revealed that Binance had submitted a legal memorandum supporting its motion to dismiss the SEC’s lawsuit. Binance’s legal team cited the Ripple ruling as the basis for their argument, emphasizing that XRP sales were blind bid/ask transactions rather than investment contracts.
SEC Anticipates Ripple Ruling Impact on Other Crypto Companies
Morgan suggested that the SEC may have anticipated other cryptocurrency companies like Binance and Coinbase using the Ripple ruling to strengthen their defenses. Fagel agreed with this notion and stated that the SEC’s broader regulatory program against crypto exchanges could be jeopardized by the Ripple ruling. Fagel acknowledged that if the ruling only affected issuers of securities-related assets, the SEC might have found ways around it.
SEC Seeks Interlocutory Appeal in Ripple Case
In July 2023, U.S. District Judge Analisa Torres delivered a mixed ruling in the ongoing SEC v. Ripple lawsuit. A Pretrial Scheduling Order set a provisional jury trial for April to June 2024. The SEC filed a motion for interlocutory appeal in August, which Ripple opposed in September. The SEC argued that complex legal questions justified interlocutory review, while Ripple accused them of prolonging the litigation to continue selling XRP. The court now has to decide whether to send the case for further review or proceed with the scheduled jury trial.
Hot Take: SEC Aims to Protect Regulatory Efforts Against Crypto Exchanges
The SEC’s decision to seek an interlocutory appeal in the Ripple lawsuit is driven by its desire to safeguard its broader regulatory program against cryptocurrency exchanges like Binance. By leveraging the Ripple ruling, Binance and other companies could strengthen their defenses, posing a threat to the SEC’s regulatory efforts. If the ruling only affected issuers of securities-related assets, the SEC might have found ways around it. However, given its impact on crypto exchanges, the SEC has chosen to pursue an interlocutory appeal. The court’s decision will determine the next steps in this high-profile legal battle.
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