- The SEC vs. Ripple legal battle has taken a different turn.
- The regulator has lost the motion to appeal Ripple’s win.
- The judge has set a trial date for next year.
The U.S. Securities and Exchange Commission (SEC) has lost a motion that sought to appeal its loss against Ripple, the company behind the issuance of the XRP token.
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On July 13, U.S. District Judge Analisa Torres ruled that the sale of XRP to retail customers via public exchanges did not meet the legal provisions of a security under the federal securities laws, a decision that seemed to have irked the regulator, prompting its lawyers to file a request for an interlocutory appeal on August 9.
Motion for Interlocutory Appeal Denied
In a court order dated October 3, Judge Torres denied the SEC’s motion for certification of an interlocutory appeal and dismissed claims by the regulator that there was substantial ground for difference of opinion about the Court’s holding as to the other distributions.
An excerpt of the court document.
Referring to what constitutes a security under the Howey Test, the judge affirmed that the regulator had failed to present sufficient evidence demonstrating that programmatic buyers of XRP were influenced to purchase the token by the “entrepreneurial or managerial efforts of others.”
“The Court held that based on the totality of the circumstances in this case, including an examination of the facts, circumstances, and economic realities of the transactions, Ripple’s Programmatic Sales could not lead investors to reasonably expect profits from Ripple’s efforts,” the document read.
While keen observers see this as a massive defeat for the regulator, there could be more developments in the future, as Judge Torres has retained a trial date for the case.
A Major Defeat for the Regulator?
The partial win by Ripple against the SEC might be a “watershed moment” for the crypto industry, but just not yet.
According to the court order, the courtroom battle is still on, as both parties have been invited to submit any motions in limine by December 4 and oppositions towards the said motions by December 18. The pretrial conference will begin on April 16, 2024.
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