The U.S. Securities and Exchange Commission has filed a last-minute appeal in its ongoing legal proceedings against Ripple Labs to partially overturn a summary judgment granted by U.S. District Judge Annalisa Torres a year ago.
Torres' July 2023 ruling partially sided with Ripple, concluding that the company's sale of XRP to retail investors on digital asset platforms did not violate US securities laws.
The court confirmed that these transactions did not meet the legal criteria for an investment contract, against the SEC's extensive efforts to regulate the sale of cryptocurrency under existing securities laws.
In a second hearing at the U.S. Court of Appeals late Thursday, the SEC will not challenge the ruling that XRP sold to retail investors on retail exchanges are not securities. Instead, the agency is focusing its testing on other key aspects of its decisions.
The appeal targets the court's ruling that Ripple's offerings and sales of XRP on digital asset trading platforms, as well as private sales by Ripple executives Bradley Garlinghouse and Christian Larsen, did not constitute warranty violations.
The agency is challenging the ruling that Ripple's non-cash consideration of XRP does not violate securities laws.
Ripple's institutional sales of XRP to large investors were previously found to violate securities laws by the US Southern District Court, which imposed a $125 million civil penalty on the San Francisco-based firm.
The SEC's appeal, which will be reviewed de novo, allows the appellate court to reconsider the interpretation of securities laws in relation to the sale of XRP on digital platforms and non-cash transactions.
De novo means that the appellate court considers these legal issues from scratch, without deference to the district court's interpretations. Ripple's victory over retail XRP, however, is not part of its appeal.
While the SEC is widely expected to file its notice of appeal on October 2, users on social media have commented that the agency missed the 14-day window to file Form C.
Form C, in terms of appellate court practice, is used by the appellant in this case, SEC – to provide basic information about the appeal and the lower court's decision.
Filing is mandatory and must be done within 14 days of the notice of appeal, according to the statutory form. The document is dated October 16, the date some have accused him of losing the agency, while the second court document shows it was dated October 17.
Decrypt Tried contacting the SEC at this point but has yet to hear back. A Ripple spokesperson did not respond to questions regarding the application deadline window. Decrypt In a social media post by the firm's chief legal officer, Stuart Alderotti.
“There's nothing surprising here – once again, it's made clear. The court's ruling that “XRP is not a security” is not being appealed. That decision is according to the law of the land,” said Alderoty He tweeted. Thursday.
“Expect Ripple's Form C filing next week,” the executive added.
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