- The SEC and Ripple will clash in the courts in the second quarter of 2024, according to a judge’s filing.
- The agency made its intentions to appeal known in a letter this week.
The US Securities and Exchange Commission intends to appeal a recent ruling in its case against Ripple Labs, according to a letter filed on Wednesday with the District Court for the Southern District of New York.
The letter is not a formal appeal, rather a request to be allowed to appeal.
The filing comes a week after the agency hinted at the possibility of an appeal, adding another twist to a lawsuit that has roiled since 2020.
The markets watchdog, and the blockchain-based digital payment network and protocol are now heading towards a face-off in the courts.
Judge Analisa Torres will have to approve the SEC’s request to appeal.
Torres ruled in mid-July that sales of Ripple’s XRP token did not qualify as the sale of securities when sold to the public via exchanges.
However, she also said that sales of XRP tokens were sometimes illegal transactions when sold to institutional investors.
While hardly the slam-dunk some crypto netizens may’ve bolstered at the time, XRP’s price climbed as high as $0.84 as several crypto platforms, such as Coinbase and Kraken rushed to relist the token on their exchanges.
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Ripple CEO Brad Garlinghouse and executive chairman Chris Larsen are also named as defendants in the suit, alongside Ripple Labs.
The next part of the trial will be a jury trial and will start in the the second quarter of 2024, according to a pretrial scheduling order filed by Torres on Tuesday.
The SEC alleged that the two executives played a central role in illegal offerings of XRP.
Both have long contended that the SEC’s classification of cryptocurrencies of securities is erroneous, and have criticised what they say is heavy-handed approach to regulation by the agency.
SEC chair Gary Gensler, a known hardliner on crypto regulation, has brushed off such claims, and maintained that nearly all crypto assets qualify as securities and should be regulated as such.
The SEC’s plan to appeal emerged days after another New York judge in the Terralabs case rejected the mid-July ruling, casting doubt over Torres’s decision.
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While some crypto litigants watched the Terra ruling with disappointment, a top crypto lawyer recently told DL News’ regulation correspondent Joanna Wright that the legal arguments derived from the XRP ruling will still sway other judges.
“Just as this court explicitly rejected the approach of the XRP ruling, another court could explicitly reject this decision just as easily,” Teresa Goody Guillén, a partner at law firm BakerHostetler and a former litigation counsel for the SEC, said.
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