Ripple Opposes SEC's Expected Appeal

Author: Mike Dalton, CryptoSlate; Compiler: Song Xue, Jinse Finance

**Ripple filed a document on Aug. 16 expressing its objection to an expected interlocutory appeal by the U.S. Securities and Exchange Commission (SEC). **

In December 2020, the SEC accused Ripple and two of its members of violating security regulations by selling XRP tokens. Ripple obtained summary judgment in the case on July 13, 2023, with the judge ruling that a programmatic or publicly traded sale of XRP was not an offering of securities.

However, on Aug. 9, the SEC filed a court document setting out an interlocutory appeal challenging the ruling in favor of Ripple.

Ripple’s latest filing aims to prevent such events from happening. The company argued that the SEC’s anticipated appeal was a departure from its previous focus, writing:

“By failing to meet its duty to present the facts in support of extending the [Howey test] to all issuance facts of [Ripple’s] digital asset XRP, the SEC has now turned around and rushed to appeal what it claims… It’s a A purely “issue of law” that affects all other digital asset cases."

Ripple stated that the special circumstances required for an interlocutory appeal did not exist, and went on to address the SEC’s previous point.

Ripple Responds to SEC Arguments

Ripple argued that the contested summary judgment does not involve controlling legal issues, noting that the security status of programmatic XRP sales does not involve purely legal issues that can be decided “quickly and cleanly.” Instead, the question can only be decided by considering various facts through the Howey test — a test that Ripple calls a “certain fact” test by the SEC’s own admission.

Ripple further argues that the **SEC failed to raise significant grounds for challenging the prior court decision. ** While the SEC has previously hinted at an “intra-regional split,” Ripple said the differences were “illusory.”

**Although the court in charge of the SEC’s separate case against Terraform Labs declined to distinguish between programmatic and institutional buyers, it similarly concluded that digital assets are not necessarily securities offerings, Ripple said. ** Ripple also argued that other pending SEC cases are not evidence of a split within the district, as each case has different facts and circumstances.

In the end, Ripple argued that the **SEC’s appeal would not help the case end and would actually raise further legal issues. ** The SEC previously argued that its interlocutory appeal would simplify and increase the efficiency of the proceedings.

The foregoing matters relate only to Ripple’s programmatic sales and other offerings. Separately, the U.S. Securities and Exchange Commission (SEC) has deemed Ripple’s institutional sales to be securities. Additionally, two Ripple members will face a jury trial for their involvement in the sale business.