SEC's Response to Challenge Groundbreaking XRP Ruling

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The U.S. Securities and Exchange Commission (SEC) announced its intention to pursue an "interlocutory appeal" following a judge's decision regarding Ripple's XRP programmatic sales. This move was disclosed in a court submission on Wednesday.

The SEC has expressed its intention to request permission for an appeal on a specific aspect of a recent ruling, concurrently with the ongoing trial of other aspects of the SEC's case. By obtaining authorization for an interim appeal, the regulatory body aims to potentially avert the necessity for two separate trials involving both the SEC and the government.

"Specifically, the SEC seeks to certify the Court’s holding that Defendants’ 'Programmatic' offers and sales to XRP buyers over crypto asset trading platforms and Ripple’s 'Other Distributions' in exchange for labor and services did not involve the offer or sale of securities under [the Howey test]," the SEC filing said.

In the previous month, a federal judge made a determination that although Ripple's direct sales of XRP to institutional investors were in violation of securities regulations, its automated sales to retail investors conducted through exchanges were deemed compliant.

Judge Analisa Torres from the U.S. Southern District Court had provisionally set a trial date for unresolved matters from the motion for judgment for the second quarter of 2024.

In the submitted documents, the SEC indicated that Ripple's deadline for response is set for August 16, 2023, which is one week from the date of the letter's submission. Additionally, the SEC suggested submitting an initial brief outlining the grounds for appeal on August 18. Following this, Ripple will be granted a two-week window to provide their response, and if approved by the judge, the SEC will have an additional week to counter-reply to Ripple's submission.

Earlier, the SEC had suggested the possibility of appealing the decision in another case. During discussions with Judge Jed Rakoff, the regulator's lawyers had requested him to disregard the ruling while he was considering Terraform Labs' request to drop the SEC lawsuit against them. Subsequently, Rakoff turned down the dismissal request and, in doing so, contested Torres' verdict on programmatic sales.