Ripple’s legal team asserts that the SEC lacks the prerequisites to seek an appeal in their ongoing lawsuit. Lawyers contended that the SEC appealed primarily due to dissatisfaction with a July court ruling that objectifies that XRP is mostly not a security token.
In a September 1 submission to the US District Court in the Southern District of New York, Ripple’s legal team highlighted the fault in SEC’s appeal.
The attorneys argued that the case lacked the “exceptional circumstances” necessary for an interlocutory appeal and urged the judge to reject any appeal or stay request. Ripple pointed out that the SEC hasn’t tried to meet the stay standard, even after the Individual Defendants highlighted this in their pre-motion letter.
In a separate response, the Individual Defendants voiced their opposition to the SEC’s request, which Ripple subsequently joined.
How did it start?
In December 2020, the SEC initiated a lawsuit against Ripple, CEO Brad Garlinghouse, and co-founder Chris Larsen, causing numerous exchanges to remove XRP to evade potential legal complications.
In a July court ruling by Judge Analisa Torres, who determined that XRP mostly was not a security under SEC. After Judge Torres’ ruling, several of these exchanges indicated their intention to reintroduce XRP or consider doing so.
In August, the SEC initiated an appeal and requested a stay regarding this decision. During that period, the SEC asserted significant disagreements on the relevant laws, justifying their appeal.
In an August 29 X post, Garlinghouse expressed his disappointment. Many within the US crypto community needed to employ legal channels to demonstrate the SEC’s persistent inaccuracies in facts and law.
SEC putting lawsuits on Crypto Firms
During 2023, the SEC directed its attention towards several cryptocurrency firms, accusing them of violating securities regulations, which included Binance and Coinbase. On August 29, an asset management firm, Grayscale, secured a legal triumph over the SEC when an appeal mandated a reassessment of its application for a Bitcoin exchange-traded fund (ETF).
The SEC has extended its rigorous enforcement efforts within the cryptocurrency industry, filing fresh charges against the crypto investment manager Titan on August 21 for making misleading advertising claims.
The SEC charged a former US corrections officer on August 23 for their alleged participation in a crypto scam that exhibited characteristics similar to a pump-and-dump scheme.
How much has the lawsuit impacted Ripple?
Renowned crypto lawyer John Deaton recently remarked on the repercussions of the ongoing legal proceedings between the SEC and Ripple. He contends that the lawsuit has hindered XRP’s adoption for three years. Deaton emphasized several occasions when prominent crypto entities, including Coinbase, reached out to the SEC for regulatory clarity before adding XRP to their listings, and they encountered no objections.
He pointed out that the protracted legal battle between the SEC and Ripple has resulted in a three-year setback for XRP’s adoption. Ripple’s CTO, David Schwartz, recently addressed the situation, underscoring its intricate nature following the SEC’s granted motion for appeal.
He explained that the SEC’s decision to pursue an appeal at this juncture is rooted in their belief that the case has not reached a definitive conclusion according to their interpretation. Besides the lawsuit against Ripple, the SEC actively participates in various other legal proceedings related to cryptocurrencies.
SEC legal team steps down
In the meantime, the legal team of Pascale Guerrier, Richard Best, and Robert MacDonald Moye, representing the US SEC in the ongoing Ripple lawsuit, has decided to step down from their roles in the case.
Various attorneys have entered and exited the legal proceedings involving Ripple Labs and SEC, as evident from court documents filed on August 23.
The most recent motions sought approval for removing attorneys Richard Best and Robert MacDonald Moye from the trial. Best’s motion was swiftly granted due to an extended medical leave. Judge Analisa Torres is yet to decide on Moye’s withdrawal, which remains pending after the motion was submitted.
On the same day, a motion was submitted to have attorney Pascale Guerrier removed from the case, a request that the judge swiftly approved. In a legal maneuver on August 23, Judge Torres approved for attorney Michael A. Schulman to represent Ripple CEO Brad Garlinghouse. She also greenlit attorneys Marc J. Jones and Peter Bryan Moores to act on behalf of the SEC.
The alterations prompted the crypto community to express their views on social media platforms in response. However, some perceive the situation as less critical, as noted by crypto lawyer John Deaton, who believes these changes have minimal importance within the overall scope of the case.