SEC seeks to certify interlocutory appeal in Ripple case, but judge denies request.
The Securities and Exchange Commission (SEC) sought to certify an interlocutory appeal to reverse its recent and widely reported court defeat against San Francisco-based blockchain technology company Ripple Labs, but District Judge Analisa Torres denied the request.
Although Ripple has gained a lot from this, the SEC still has the right to appeal. Instead, the regulatory body will have to hold out on filing an appeal until after the trial is over and a final decision is made before doing so.
Ripple wins once again.
In its most recent judgment, the US District Court for the Southern District of New York rejected the SEC’s application for a number of reasons.
The judge made it clear that the issues at hand require intricate factual and economic analysis and go beyond simple legal problems. According to the judgment, the court had carefully considered all of the circumstances surrounding the various transactions and schemes involving the sale and distribution of XRP.
Because a sizable body of factual evidence and thorough expert reports supported the court’s subsequent rulings, these issues are not appropriate for interlocutory appeal.
The judge pointed out that the SEC failed to show that there was sufficient justification for a difference of view or produce opposing authorities on the matter. Although the SEC cited a different recent judgment to support such a divergent viewpoint, the court determined that the case in question did not contradict the Court’s reasoning and that the SEC’s arguments were invalid.
Last but not least, the judge emphasized that allowing an interlocutory appeal in this case would probably cause the lawsuit to drag on since it would be subjected to numerous rounds of appellate review, which would ultimately delay the settlement of the issue. The court thought that the case should be decided instead, allowing for one round of appellate review based on the entire record.
The SEC’s move for interlocutory appeal was denied, which means that the trial between the SEC and Ripple Labs will proceed as planned and start on April 23, 2024.
This development highlights how difficult it is to resolve legal problems in the cryptocurrency industry, where the courts are still debating whether to classify digital assets as securities and how to apply current securities rules.
The verdict in this case will probably have a substantial impact on the legal system governing digital assets in the US.
The SEC may yet file an appeal, but
According to the decision, the SEC has not “lost its appeal” in the sense that it is no longer permitted to appeal. It indicates that the SEC’s request for a specific issue interlocutory appeal has been rejected.
Interlocutory appeals are requested prior to the entry of a final decision in a matter, and they are normally only granted under unusual circumstances when specific legal requirements are satisfied. The judge in this instance found that the SEC’s motion for an interlocutory appeal did not satisfy those requirements.
After the trial is over and a verdict is rendered, the SEC can still choose to appeal the case. In such a situation, the commission may make whatever claims, legal defenses, or arguments it deems pertinent to the case. This enables both parties—Ripple and the SEC—to present their arguments and supporting documentation to a higher court for review in the event that they are unhappy with the verdict.