SEC vs Ripple: Judge Torres Allows Interloctury Appeal From Securities Watchdog

• The SEC has until August 18 to file its motion and Ripple must submit opposition papers by September 1.
• On August 16, the XRP issuer with co-founders Brad Garlinghouse and Chris Larsen opposed the SEC’s request for an interlocutory appeal.
• The co-defendants argued that the SEC failed to meet the burden of proof to support classifying programmatic sales of XRP as securities.

A Thursday ruling granted the U.S. Securities and Exchange Commission permission to file an interlocutory appeal in its case against XRP issuer and blockchain company, Ripple Labs. The SEC has until August 18th to file its motion.

This approval comes a day after Ripple Labs and co-defendants Brad Garlinghouse and Chris Larsen opposed the SEC’s request for an interlocutory appeal, per court documents seen on August 16.

The co-defendants argued that the SEC failed to meet the burden of proof to support classifying programmatic sales of XRP as securities.

After the SEC files its motion on Friday, the digital asset company is expected to submit opposition arguments by September 1. Thursday’s ruling allows the SEC to file a motion to appeal, not to be mistaken for Judge Torres’s approval of the appeal itself.

SEC vs Ripple Headed To Trial

The SEC’s interlocutory motion seeks to appeal a specific ruling from Judge Torres. Previously, Judge Torres issued a summary judgment in partial favor of Ripple Labs. The verdict said programmatic sales of XRP did not qualify as securities considering the Howey test.

However, XRP sales to institutional investors met the Howey standard for classifying securities. SEC vs Ripple Labs et all is scheduled for trial in the Southern District of New York by Q2 2024.

There’s a deadline of December 4, 2023 for all parties to submit any filings and motions to exclude evidence from a jury, per court documents.

Garlinghouse and Larsen, Ripple co-founders, also face charges of aiding and abetting violations of U.S. securities laws.

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