In a significant development in the ongoing legal battle between Ripple Labs and the U.S. Securities and Exchange Commission (SEC), Ripple gains victory again as Judge Analisa Torres has delivered a resounding victory for the former. On October 3, 2023, Judge Torres rejected the SEC’s interlocutory appeal, further validating Ripple’s stance that its native cryptocurrency, XRP, is not a security. This ruling could have far-reaching implications for the cryptocurrency industry and the regulation of digital assets in the United States.
U.S. District Judge Analisa Torres has dismissed the Securities and Exchange Commission’s interlocutory appeal in the ongoing lawsuit against Ripple. In her decision, Judge Torres pointed out that the SEC did not provide a compelling rationale for challenging her earlier ruling. Additionally, she has scheduled a trial for April 2024 to address the unresolved matters in the case.
Judge Torres Denies SEC’s Appeal in Ripple Lawsuit, Schedules Trial for April 2024
In a decision announced on Tuesday, the judge overseeing the SEC’s legal battle against Ripple rejected the regulator’s request for an interlocutory appeal. The SEC had submitted a motion seeking certification for an interlocutory appeal on two judgments related to XRP within the Ripple case. Judge Torres stated, “The SEC’s motion for certification of interlocutory appeal is denied, and the SEC’s request for a stay is denied as moot.” She explained that the SEC had not effectively demonstrated in its appeal that the previous decision was significantly flawed.
Going back to July, Judge Torres had ruled that Ripple’s Programmatic Sales of XRP “did not qualify as the offer and sale of investment contracts.” She also clarified that in the context of Programmatic Sales, XRP “does not inherently resemble a security.”
In contrast, Judge Torres’ decision suggested that institutional sales of XRP could be viewed as transactions involving securities. Following the announcement of the verdict on Tuesday, XRP initially experienced a roughly 6% increase in value, although it has since retraced a small portion of those gains.
Judge Analisa Torres Rejects SEC’s Request for Interlocutory Appeal
During the night, Judge Torres dismissed the SEC’s motion for an interlocutory appeal. Defense attorney James Filan shared the court’s decision, announcing, “BREAKING: Judge Torres has DECLINED the SEC’s Request for an Interlocutory Appeal.” Judge Torres made her position clear regarding the expectation of profits. The court’s ruling stated, “The Court determined that considering all aspects of this case, including a comprehensive review of the facts, circumstances, and the economic realities of the transactions, Ripple’s Programmatic Sales did not create a reasonable expectation of profits from Ripple’s endeavours for investors.”
Amicus Curiae attorney John E. Deaton summarized the court’s verdict, saying, “And let me emphasize, my initial review of her order is unassailable. Furthermore, evidence provided by XRP holders was once again referenced in this decision, particularly in her factual findings, which she relied upon.”
Deaton added, “She clarified that she never stated that no digital asset could ever be considered a security if sold on an exchange. Instead, she emphasized that XRP, in this particular case, did not meet that criteria. She further noted that even though some individuals acquired XRP for speculative purposes, the SEC did not demonstrate that it was tied to Ripple’s efforts.”
In a resounding victory, Ripple gains victory again as Judge Analisa Torres denied the SEC’s interlocutory appeal, reinforcing the company’s stance that XRP is not a security. The court’s decision, rooted in a comprehensive examination of the facts and economic realities, emphasized that Ripple’s Programmatic Sales did not foster a reasonable expectation of profits tied to Ripple’s efforts. This ruling sets a significant precedent in the ongoing battle between cryptocurrency and regulatory oversight, highlighting the importance of clarity in the crypto space. It also underscores the SEC’s need to provide robust evidence when categorizing digital assets as securities. The crypto industry eagerly awaits the April 2024 trial date for further clarity.