The ongoing legal skirmish between the SEC and Ripple Labs added another chapter as Judge Analisa Torres denied the SEC’s request for an interlocutory appeal on Oct. 3.
With the appeal motion off the table, both parties gear up for a trial set for April 23, 2024. The verdict could reshape regulatory norms in the crypto landscape.
Ripple’s native cryptocurrency XRP spiked 5% to trade at 0.54 as of press time.
The Ripple ruling
In a July ruling, Torres found that certain programmatic sales of Ripple’s cryptocurrency XRP did not violate securities laws due to a blind bid process. However, other direct sales to institutional buyers were deemed securities, handing a split verdict to the SEC.
Looking to overturn the July decision, the SEC expanded its appeal to encompass other distributions where XRP was exchanged for goods or services.
Ripple countered by arguing that the conditions needed for interlocutory appeal weren’t met. They cited two primary reasons: the absence of a controlling legal question and the SEC’s displeasure with the court’s application of the Howey test to most XRP transactions.
The ripple effect of the SEC vs. Ripple Labs case could touch other crypto platforms like Binance and Coinbase. The SEC believes the case’s outcome may significantly influence pending lawsuits involving these platforms.
However, Ripple’s attorneys previously stated that if the SEC’s appeal was greenlit, they’d launch a counter “cross-appeal” related to XRP’s institutional sales.
Pre-trial proceedings
Per the court order, the trial is slated to commence on April 23, 2024, at 9:00 a.m. Both parties are now immersed in pretrial preparations, navigating through a timeline that demands meticulous adherence to scheduled milestones.
The parties involved in the case have until Dec. 4 to submit any motions in limine, with oppositions to any such motions due by Dec. 18. Moreover, they are required to submit all necessary pretrial filings, which include their proposed joint pretrial order, requests to charge, verdict form, and voir dire questions, by the aforementioned December deadline.
The final pretrial conference is set for April 16, 2024. Prior to this conference, both counsels, along with Ripple Labs and SEC representatives, are ordered to convene in person for a minimum of one hour to discuss potential settlement avenues.
With the official order signed by Judge Analisa Torres on Oct. 3, Ripple Labs and the SEC are locked into a precise and demanding timeline leading to the trial.
As the case propels forward, it continues to attract widespread attention, spotlighting regulatory practices, digital currencies, and the evolving landscape of the financial sector.