Ripple Objects to SEC's Appeal of Ruling on Crypto as Non-Security
Ripple Labs has objected to the Securities and Exchange Commission's (SEC) request to appeal a federal judge's ruling that the XRP token is not a security when sold to the public.
On Friday, Ripple filed a request with US District Judge Analisa Torres in New York, urging her to deny the SEC's plea, according to a report from Bloomberg.
The company argued that the SEC is hastily seeking an appeal on a legal question that applies to all digital asset cases, despite differences in factual and legal procedural postures across various SEC enforcement actions.
To proceed with its appeal, the SEC requires Judge Torres's permission, as her ruling was not a final judgment.
In addition to their appeal, the SEC is also seeking to pause its lawsuit against Ripple, which alleges the company offered unregistered securities, until the appeal is resolved.
Back in July, a US court ruled in favor of Ripple in the ongoing lawsuit brought by the SEC, claiming that selling XRP on exchanges in itself does not constitute an investment contract.
The ruling, issued by the District Court for the Southern District of New York, stated that the “offer and sale of XRP on digital asset exchanges did not amount to offers and sales of investment contracts.”
However, the federal judge also ruled that XRP is a security when sold to institutional investors, as it met the conditions set in the Howey Test.
The SEC argues that immediate review is necessary since the outcome of this case may impact other cryptocurrency-related lawsuits, including ongoing suits against major players such as Coinbase Global Inc. and Binance Holdings Ltd.
Notably, another federal judge in Manhattan, Jed Rakoff, opposed Torres's approach in a separate SEC case involving Terraform Labs
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