In the ongoing legal battle between the U.S. Securities and Exchange Commission (SEC) and Ripple Labs, the technology firm has responded in court, opposing the SEC’s request for an interlocutory appeal. Ripple Labs, CEO Brad Garlinghouse, and former CEO Christian Larsen have expressed strong disapproval of the SEC’s move.
The SEC’s request was filed last week, claiming that the appeal would “avoid protracted remedies” in litigation. Ripple Labs’ lawyers, including Chief Legal Officer Stuart Alderoty, wrote to Judge Analisa Torres, arguing that the SEC’s request was an “about face” due to its strategy to regulate the digital asset sector by enforcement. Alderoty emphasized that the SEC’s request lacked merit, as it failed to show “a substantial ground for difference of opinion”.
In July, Judge Torres determined that XRP did not qualify as a security during “programmatic” sales, although it fulfilled the criteria of the Howey test when sold to institutional investors. The SEC has since sought to challenge this ruling, specifically targeting the decision on programmatic sales and “other distributions”, such as the offering and sale of XRP for goods and services.
Garlinghouse also weighed in on the matter, reminding the public that the request for appeal does not change the fact that XRP is not a security. He expressed frustration with the SEC’s continued claims that he and Larsen acted recklessly in believing that XRP is not a security, calling such allegations “utter nonsense”.
Garlinghouse further stated that he looks forward to proving the SEC wrong. This was a reference to the Judge’s July 13 ruling that the SEC would be put to their proof at trial regarding their claim against him and Larsen.
As of now, Ripple Labs maintains that the SEC may proceed with an appeal “in the normal course after a final judgment with a full record”. This stance introduces an additional layer of intricacy to a case that has already garnered considerable focus within the cryptocurrency community.
The legal battle between Ripple Labs and the SEC continues to unfold, with both sides firmly entrenched in their positions. The case’s outcome could have far-reaching implications for the digital asset sector, setting precedents for how cryptocurrencies are regulated in the United States.
A jury trial for Ripple Labs vs. SEC has been set for spring 2024, marking another significant milestone in the legal proceedings. The trial is expected to bring further clarity to the regulatory landscape of digital assets, potentially shaping the future of the cryptocurrency industry.
