Lawyers argued the SEC’s grounds for an appeal was based on “dissatisfaction” with a July court decision that the XRP token did not largely qualify as a security.
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Lawyers representing Ripple in its lawsuit with the United States Securities and Exchange Commission (SEC) have suggested the regulator hasn’t met the requirements to request an appeal.
In a Sept. 1 filing with U.S. District Court for the Southern District of New York, Ripple’s legal team said the SEC’s grounds for an appeal largely rested on “dissatisfaction” with a judge’s decision that the XRP token did not qualify as a security for sales to retail investors. The lawyers said “exceptional circumstances required for interlocutory appeal” were absent in the case, and called on the judge to both deny any request for an appeal or stay.
“The SEC has not even attempted to meet the standard for a stay, even after the Individual Defendants identified that omission in their pre-motion letter,” said Ripple. “The Individual Defendants write separately to oppose the SEC’s request. Ripple joins that opposition.”
In August, the commission moved to appeal and stay a July court decision in which Judge Analisa Torres ruled XRP largely was not a security under SEC guidelines. At the time, the SEC argued there was “substantial ground for differences of opinion” on the laws at issue.
The SEC filed its lawsuit against Ripple, CEO Brad Garlinghouse and co-founder Chris Larsen in December 2020, prompting many exchanges to delist the XRP token to avoid possible legal entanglement. Following the Torres’ ruling, many of the same firms said they would relist the token or explore doing so in the future.
“It’s sad that so many in the US crypto community have to resort to the legal process to prove this SEC is out of control and consistently wrong on the facts and the law,” said Garlinghouse in an Aug. 29 X post.
The SEC has targeted a number of crypto firms in 2023 over allegations of securities violations, including Binance and Coinbase. On Aug. 29, asset manager Grayscale achieved a court victory against the SEC following an appeal ordering a review of its application for a spot Bitcoin (BTC) exchange-traded fund.
The civil lawsuit between the SEC and Ripple is ongoing. Torres proposed a jury trial for the case starting in the second quarter of 2024.