The United States Securities and Exchange Commission (SEC) has recently filed a court document stating its intention to submit an “interlocutory appeal” in response to a judge’s ruling on Ripple’s programmatic sales of XRP. This move comes as the SEC seeks to appeal a portion of the ruling while other parts of the case proceed to trial. By pursuing this interlocutory appeal, the SEC aims to potentially avoid the necessity of conducting two separate trials for the SEC and the government.
Background on the SEC’s Appeal
The SEC is specifically seeking to appeal the court’s holding that Ripple’s “Programmatic” offers and sales of XRP did not involve the offer or sale of securities under the Howey test. Last month, a federal judge issued a verdict affirming that Ripple’s direct sales of XRP to institutional investors were in breach of securities regulations, but its automated sales to retail investors via exchanges were deemed compliant.
XRP has been given until August 16, 2023, to provide a response to the SEC’s appeal. The SEC has proposed submitting an opening brief outlining the appeal on August 18. Ripple will then have a two-week timeframe to present its response, and the SEC will have an additional week to counter if the judge grants approval for the filing.
Ripple’s Response and Potential Jury Trial
Ripple is expected to provide its response to the SEC’s appeal by August 16. The response will likely outline Ripple’s arguments against the SEC’s position and its reasoning for why the court’s ruling should be upheld.
In the meantime, Judge Torres has indicated that the court will seek to schedule a jury trial for the SEC and Ripple case in the second calendar quarter of 2024. Both parties have been ordered to submit blackout dates for trial by August 23. This suggests that the court is preparing for a potentially lengthy legal battle between Ripple and the SEC.
The SEC’s Previous Indication of Appealing
Interestingly, the SEC had previously indicated the possibility of appealing the court’s decision in a separate case. During the consideration of Terraform Labs’ motion to dismiss its SEC lawsuit, the regulatory agency’s legal representatives advised Judge Jed Rakoff of the same court to disregard the ruling in question.
This indicates that the SEC is determined to establish a precedent regarding the classification of digital assets and is willing to pursue appeals in multiple cases to achieve its desired outcome.
As Ripple prepares its response to the SEC’s appeal, all eyes will be on the court’s eventual decision. The timing and outcome of the potential jury trial in 2024 will also be closely watched. The ripple effects of this case will undoubtedly shape the future of the cryptocurrency industry and its relationship with regulatory authorities.