In a significant development with far-reaching implications, Ripple Labs Inc., along with its executives Brad Garlinghouse and Chris Larsen, has vehemently opposed the Securities and Exchange Commission’s (SEC) request for an interlocutory appeal.
Ripple argues that the current court decision does not warrant an interlocutory appeal and emphasizes the SEC’s selective regulation of the crypto industry, raising questions about the application of the Howey test.
Read Also: Ripple CTO David Schwartz Clarifies Key Aspects of the SEC Appeal
Ripple’s Opposition
Ripple Labs Inc. and its top executives have responded strongly to the SEC’s attempt to seek an interlocutory appeal in an ongoing case that carries significant implications for the cryptocurrency sector.
This opposition was revealed by Eleanor Terrett, a Fox Business journalist. The outcome of this case has the potential to reshape the regulatory landscape of the U.S. crypto space, specifically concerning the classification of XRP.
🚨NEW: @Ripple files opposition to the @SECGov’s motion to certify interlocutory appeal. 👇🏼https://t.co/uKg4RBCnHC
— Eleanor Terrett (@EleanorTerrett) September 1, 2023
Challenging the SEC’s Motion
The SEC justifies its request for an interlocutory appeal by claiming that the Ripple case raises crucial legal questions that impact the entire digital asset spectrum. Ripple’s counter-arguments are multi-faceted. First, they contend that the current court decision does not present a predominant “controlling question of law” that necessitates an interlocutory appeal.
Second, what the SEC considers a “substantial ground for disagreement” is seen by Ripple as dissatisfaction with the court’s interpretation of the Howey test applied to the case. Lastly, Ripple believes that regardless of the interlocutory appeal’s outcome, the complex litigation process will continue.
Ripple, along with other defendants, also objects to the SEC’s request for a stay, emphasizing that the SEC has failed to provide sufficient grounds for such action.
Read Also: Top Lawyer Points Up Likely Implications if Ripple Approves the SEC Appeal Request
The SEC’s Regulatory Puzzle
In the filing on September 1, Ripple, Garlinghouse, and Larsen argue that the SEC’s pursuit of this case reflects a selective approach to regulating the U.S. crypto industry.
They highlight the main point of contention; whether the Howey test is applicable to Ripple’s specific operational circumstances. From their perspective, the SEC appears to be adjusting its “litigation positions” based on its objectives, deviating from a genuine commitment to legal standards.
Recall that on August 18, the SEC officially filed a motion for leave to file an interlocutory appeal to challenge a part of Judge Torres’s ruling.
Ripple’s strong opposition to the SEC’s request for an interlocutory appeal sets the stage for a critical legal battle that could redefine crypto regulations in the United States.
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