District Judge Analisa Torres has denied the Securities and Exchange Commission’s (SEC) request to certify an interlocutory appeal seeking to overturn her recent, widely publicized courtroom loss against San Francisco-based blockchain technology company Ripple Labs.
While this is a huge win for Ripple, the SEC has not lost its ability to appeal. Instead, the regulator will need to wait until the trial is over and a final ruling is issued to pursue its appeal on all relevant issues simultaneously.
Ripple scores another win
The U.S. District Court for the Southern District of New York denied the SEC’s request for a recent order for several reasons.
the judge Confirm The issues raised are not purely legal issues but involve complex realistic and economic analyses. The order noted that the court had carefully considered the totality of the circumstances surrounding the various transactions and schemes involving the sale and distribution of XRP.
The court’s subsequent conclusions were based on an extensive factual record and detailed expert reports, making these questions inappropriate for an interlocutory appeal.
The SEC has not presented conflicting authority on these issues or demonstrated that there is a substantive basis for the difference of opinion, the judge noted. While the SEC cited another recent case to defend such a difference of opinion, the judge found that the cited case did not conflict with the court’s reasoning, and that the SEC’s arguments were incorrect.
Finally, the judge emphasized that allowing an interlocutory appeal, in this case, would likely prolong the litigation by subjecting it to multiple rounds of appellate review, ultimately delaying resolution of the matter. Instead, the court believed the case should proceed to judgment, allowing one round of appellate review over the entire record.
The decision to deny the SEC’s request for an interlocutory appeal means that litigation between the SEC and Ripple Labs will continue as scheduled, with the trial scheduled to begin on April 23, 2024.
This development underscores the complexity of legal disputes in the field of cryptocurrencies, as issues related to the classification of digital assets as securities and the application of current securities laws are still being considered in the courts.
The outcome of this case is likely to have significant implications for the regulatory framework surrounding digital assets in the United States.
The SEC can still appeal but…
The ruling does not mean that the SEC “lost its appeal” in the sense that it is permanently barred from appealing. What this means is that the SEC’s request for an interlocutory appeal on specific issues has been denied.
Don’t get too excited about the SEC’s denial of Ripple’s preliminary appeal… it doesn’t mean the SEC “lost its appeal”… it just means that if the SEC wants to appeal, it has to appeal everything at once After the trial…
There are still some useful clarifications of Torres’s opinion
– Gabriel Chabert0 (@lex_node) October 3, 2023
Interlocutory appeals are requested before a final ruling in a case, and are typically granted only in exceptional circumstances when certain legal criteria are met. In this case, the judge determined that the SEC’s request for interlocutory appeal did not meet these criteria.
The SEC still has the option to appeal the case after the trial reaches its conclusion and a final ruling is issued. In such a scenario, the committee can raise any legal issues, arguments or allegations that it believes are relevant to the case. This allows both parties – Ripple and the SEC – to present their arguments and evidence to a higher court for review if they are dissatisfied with the outcome of the trial.
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