In a significant legal development, Ripple, the blockchain technology firm, has achieved a substantial victory in its ongoing battle against the U.S. Securities and Exchange Commission [SEC]. The Southern District Court of New York, in a decisive ruling dated October 3, 2023, rejected the SEC’s motion for certification of interlocutory appeal and its request for a stay, marking a turning point in the high-stakes legal tussle between the two entities.
The SEC’s motion aimed to challenge two crucial aspects of the court’s earlier ruling. Firstly, it contested the court’s decision that Ripple’s “Programmatic” offers and sales of XRP over crypto asset trading platforms did not lead investors to reasonably expect profits from the efforts of others. Secondly, it challenged the ruling that Ripple’s “Other Distributions” of XRP as a “form of payment for services” did not constitute an “investment of money” under the law.
The court’s 24-page order emphatically stated that the SEC had failed to demonstrate the existence of controlling questions of law or substantial grounds for differences of opinion, prerequisites for granting an interlocutory appeal. The ruling highlighted that the SEC did not present a “pure question of law” that could be swiftly resolved without extensive examination of the case’s record.
Consequently, the court denied the SEC’s motion for certification of interlocutory appeal and dismissed its request for a stay as moot. This means that the SEC’s attempts to halt any remedies litigation and pretrial proceedings have been effectively thwarted.
Ripple: XRP Gains 4% Momentum
This decision comes as a major setback for the regulator, signaling that Ripple’s legal position is gaining strength. The court’s ruling also signifies that the trial proceedings will proceed as scheduled, with the trial set to commence on April 23, 2024. The outcome of this trial will have far-reaching implications not only for Ripple and the SEC but also for the broader cryptocurrency industry, as it could establish legal precedents regarding the classification of digital assets and their regulation.
After the SEC’s appeal in the Ripple lawsuit was rejected, XRP surged by nearly 4% in the last 24 hours, outpacing most cryptocurrencies. This significant price jump bolstered investor confidence in Ripple.