Ripple v. SEC: Judge Denies SEC’s Interlocutory Appeal
On October 3, U.S. District Judge Analisa Torres denied the Securities and Exchange Commission’s (SEC) interlocutory appeal of her July 13 decision. This marks another defeat for the SEC in its battle with Ripple. The initial decision by Judge Torres stated that the sale of the XRP digital token on public exchanges complied with federal securities laws because buyers had no reasonable expectation of profit based on Ripple’s efforts.
What Is an Interlocutory Appeal?
An interlocutory appeal is an appeal that takes place while other parts of a case are still ongoing. In this instance, the SEC sought permission to appeal Torres’ findings about programmatic sales and other distributions of XRP as payment for services. However, Judge Torres ruled that the SEC failed to show controlling questions of law or substantial grounds for differences of opinion.
The Battle Continues
Although crypto advocates celebrated Judge Torres’ decisions, the case is far from over. After the trial on April 23, 2024, the SEC could appeal the entire decision. If granted permission to appeal, it may take years before Ripple and the industry receive clarity. It’s important to note that Judge Torres’ initial decision did find that Ripple violated federal securities laws in its sales of XRP to institutional investors.
Other judges may not follow Judge Torres’ ruling, and there is still a lack of comprehensive legislation addressing crypto at the congressional level. Therefore, consulting legal experts well-versed in digital assets is crucial to ensure compliance with applicable laws and regulations.
Hot Take: Ripple’s Legal Battle Prolongs Regulatory Uncertainty
Ripple’s ongoing legal battle with the SEC continues to prolong regulatory uncertainty in the cryptocurrency industry. The recent denial of the SEC’s interlocutory appeal is another setback for the agency, but the final outcome of the case remains uncertain. While Judge Torres’ initial decision provided some respite for Ripple, it also highlighted violations of federal securities laws.
As the trial approaches, both Ripple and the SEC must prepare their cases, leaving the industry in a state of regulatory purgatory. It is crucial for businesses operating in the crypto space to seek legal advice to ensure compliance with evolving laws and regulations. Until comprehensive legislation is enacted, consulting with experts in digital assets is essential to avoid potential pitfalls and legal complications.
If you require legal guidance regarding crypto-related matters, you can contact Kelman PLLC for a free 30-minute consultation.
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