The Ripple vs SEC case is sadly still far from being settled. In mid-August the judge granted the SEC's request to file an interlocutory appeal, although Ripple now claims the regulator has failed to satisfy all the prerequisites necessary to justify this.
The legal battle between the U.S. Securities and Exchange Commission (SEC) and Ripple is still making waves. In mid-August the judge gave the SEC the green light to appeal the court's July ruling.
On July 13, Judge Analisa Torres, of the Southern District of New York, ruled that XRP, Ripple Labs' base cryptocurrency, was not a security for programmatic sales. This was only a partial win for Ripple, as Judge Torres also determined that XRP did constitute a security when sold to institutional investors. Despite this, the cryptosphere saw the ruling as a significant victory and a judgment that would prove necessary to define the legal framework for other digital currencies and companies engaged in similar fights with the SEC.
However, on August 15, Judge Torres granted the SEC's request to file an interlocutory appeal. This is far from a guarantee; indeed, the Second Circuit still needs to consider their appeal request. According to court documents, the SEC was required to file its request by August 18. All defendants were then required to file their opposition documents by September 1st, and the SEC must file its response by September 8. With a clear intent to appeal, it is very likely that the SEC will see this case through to the end.
However, in a September 1 court filing, Ripple argued that the SEC lacks valid grounds for an appeal, citing the absence of "exceptional circumstances." Ripple also contended that the summary judgment doesn't pose a critical legal question that justifies an immediate appeal. The firm highlighted that a quick review without extensive record examination is required for such appeals, which isn't the case here.
Furthermore, Ripple asserted that an interlocutory appeal should be granted only if it expedites the case's conclusion. The crypto firm claims that the SEC's intention to pursue the lawsuit even after an appeal victory indicates no closer ending for the lawsuit, making the appeal unnecessary. Ripple urged the court to deny the SEC's request to a stay of proceedings, arguing that the SEC failed to meet the necessary standard for such.
The judge has also filed a notice of appearance for Andrew A. Kunsak, from law firm Sidley Austin LLP, to appear as an investment banker declarant. This move would potentially prevent the disclosure of confidential information pertaining to the Hinman Speech Documents. Kunsak's involvement is primarily geared towards safeguarding the interests of their stakeholders and mitigating uncertainties. This becomes especially pertinent as the SEC seeks to appeal the Court's summary judgment ruling. Ripple had previously contested the idea of an investment banker declarant being part of the proceedings.
Ripple co-founder Chris Larsen has said that the recent federal decisions have negatively impacted San Francisco's former position as a hub for crypto and blockchain innovation. He suggested that the United States has lost its position as the global leader in blockchain technology to cities like London, Singapore, and Dubai.
When discussing the XRP case, Larsen argued that the SEC lost on key aspects that were important to both the agency and the regulation of the industry. While acknowledging the ongoing appeal process, he described the case's outcome as highly significant for both Ripple and the cryptocurrency sector, marking a pivotal moment in the industry's development.
The U.S. screwed up here on crypto and blockchain policy. This is the beginning now through the courts, unfortunately instead of through regulators, to get that clarity and get us back in the game.
Larsen didn't mince words in his criticism of Gary Gensler, the SEC's chief, for what he saw as a regulatory strategy driven more by enforcement actions than by well-defined legislative guidelines. He argued that crucial regulatory decisions, such as those involving Ripple, XRP, or any potential Bitcoin Spot ETF, should fall within the domain of Congress. Larsen asserted that it's essential to establish clear rules through legislative processes rather than relying on unelected and, in his view, misplaced decision-makers.
Despite a slight decline in XRP's price, Ripple recently executed a substantial XRP transfer to a major cryptocurrency exchange, as reported by blockchain tracker Whale Alert. A transaction involving 29,700,000 XRP was directed to Bitstamp, which, according to data furnished by Bithomp, was sent by Ripple. The firm initiated this transfer, involving nearly 30 million XRP, with the intention of selling it for about $15 million.
Following the recent updates in the Ripple SEC lawsuit, rumours that XRP could soar to a $10 level have taken XRP enthusiasts by storm. Many believed that Ripple's partial win in July would take the currency to new highs. The price did record an increase following the ruling but has since dropped as the SEC filed for appeal. We'll continue to Observe.
Check out Observers' coverage of the entire lawsuit timeline:
Mathilde Adam
Mathilde Adam
Mathilde Adam
Observers