The U.S. Securities and Exchange Commission (SEC) has announced its intention to file an “interlocutory appeal” in response to a judge’s ruling on Ripple’s sales of XRP. In a court filing made on Wednesday, the regulator stated its plans to seek “leave to” appeal certain aspects of the recent decision while allowing other parts of the SEC’s case against Ripple to proceed to trial. The SEC argues that obtaining approval for an interlocutory appeal would effectively avoid the need for two separate trials for the SEC and the government.
The SEC’s appeal centers around the court’s determination that Ripple’s “Programmatic” sales of XRP to buyers through cryptocurrency trading platforms, as well as the “Other Distributions” made by Ripple in exchange for labor and services, did not constitute the offering or selling of securities under the Howey test. The SEC filing seeks certification of the court’s position on this matter.
This development follows a recent federal judge’s ruling that while Ripple’s direct sales of XRP to institutional investors did violate securities laws, the programmatic sales to retail investors through exchanges did not. Judge Analisa Torres of the U.S. Southern District Court had tentatively scheduled a trial to address other unresolved issues related to the case for the second quarter of 2024.
Earlier, the SEC had hinted at the possibility of appealing this ruling in a separate case when its attorneys urged Judge Jed Rakoff, also of the same court, to disregard the ruling while considering Terraform Labs’ motion to dismiss its own SEC lawsuit. However, Rakoff subsequently denied the motion to dismiss and rejected Torres’ ruling on the programmatic sales as well.
