In August, the Securities and Exchange Commission (SEC) filed an interlocutory appeal against Judge Torres’ ruling in favor of Ripple Labs. In response, the crypto firm has now filed its reply in opposition to the SEC’s request for an appeal.
Ripple And Its Executives Object To Appeal
According to the court filing dated September 1, Ripple stated that the SEC doesn’t have the right to an appeal as the “exceptional circumstances” required for it are absent.
The SEC had earlier argued that an appeal was necessary because it involved controlling questions of law. The regulator also cited how Judge Torres’ ruling could affect its case against Terraform, Coinbase, and Binance.
However, according to Ripple, the summary judgment doesn’t present a controlling question of law to warrant an appeal. The company noted that a pure question of law only arises when it is one that the court can review and decide quickly without having to study the record. In this case, the appellate court will have to study the record before deciding, just like Judge Torres did.
Another ground for an interlocutory appeal being granted is whether or not an immediate appeal would ultimately ensure that the case is finalized quickly. In proving that the SEC had not satisfied this ground, Ripple stated that the Commission had shown it intended to continue its lawsuit against it even if the latter succeeded in its appeal. As such, the appeal should be rejected since it wouldn’t hasten the lawsuit.
The SEC had earlier asked that Judge Torres’ ruling be stayed pending the determination of the appeal. So Ripple also asked that the court deny the SEC’s request for a stay as the regulator had not met the standard for one.
Focus Of The Appeal
Although the court approved the SEC’s request to file an interlocutory appeal, the appeal could still be denied. If approved, however, the main focus will be on Judge Torres’ ruling that Ripple’s programmatic sales and other distributions didn’t constitute an investment contract.
The court’s ruling on the programmatic sales could have a huge impact on the crypto industry going forward. Programmatic sales include ones made through exchanges. So, if the SEC gets a ruling in its favor, it would provide it with much-needed momentum to further its case against Coinbase and Binance, where it is alleging that both exchanges offered securities.
However, some experts expect that the SEC will again lose upon appeal as the court will have recourse to the evidence adduced in the lower court and will decide that the SEC didn’t provide enough proof to back its arguments.