The U.S. Securities and Exchange Commission (SEC) moved to file an interlocutory appeal against Ripple on Aug. 18 as part of its ongoing case against the firm.
Judge Analisa Torres in the Southern District of New York previously issued rulings on Ripple’s programmatic exchange sales of XRP and its distributions of XRP as payment for services. Those rulings effectively said that those offerings were not securities.
While the SEC intends to appeal those results, it does not intend to appeal a separate ruling in its own favor. That ruling determined that Ripple’s institutional XRP sales satisfied the Howey test, which is used to determine whether an offer is an investment contract. The SEC said the court correctly determined this fact in its latest filing.
The SEC previously laid out a basis to appeal the two results not in its favor on Aug. 9. Ripple attempted to prevent the regulator from appealing on Aug. 16 but failed to do so, as the SEC gained court permission to submit the current motion on Aug. 17.
Though the SEC’s latest motion only asks the court to certify its interlocutory appeal and stay other proceedings, earlier timelines do not indicate that the SEC will immediately submit another filing toward its appeal. Instead, Ripple and other defendants will need to file their opposition papers by Sept. 1, while the SEC may file a response by Sept. 8.
Appeal focuses on case differences
The SEC claims that the two relevant rulings can be immediately appealed for several reasons, but most significantly because they involve controlling questions of law with grounds for substantial difference of opinion. The SEC specifically drew attention to the fact that another court in the same district, handling its case against Terraform Labs, came to a different conclusion on similar matters.
The SEC also argued that an immediate appeal will help the Ripple case reach its final conclusion, noting that the court will need to spend time determining remedies for Ripple through discovery and legal briefing. It also noted that Ripple is considering its appeal, implying that this could further lengthen the case.
The regulator additionally said that an appeal should be handled immediately as the court’s decision has implications for other ongoing SEC cases.