Ripple Labs bites back against SEC’s request to file appeal

August 16, 2023 Coin Telegraph

Ripple’s chief legal officer said no “extraordinary circumstance” in the case exists which warrants the Court to accept the SEC’s request for leave.

Ripple Labs has voiced its opposition towards the United States securities regulator’s move towards filing an interlocutory appeal relating to the summary judgment laid down by U.S. District Court Analisa Torres on Jul. 13.

In an Aug. 16 letter to Torres of the Southern District of New York, Ripple’s lawyers explained that because the Securities and Exchange Commission failed to satisfy elements of the Howey test relating to Ripple’s distribution of XRP — a “legal question” — the Court should reject the SEC’s motion for leave to file an interlocutory appeal.

An interlocutory appeal occurs when a ruling by a trial court is appealed while other aspects of the case are still proceeding and are only allowed under specific circumstances.

Ripple’s lawyers believe it is more appropriate for the SEC to appeal the Court’s ruling after a final judgement with a full record.

*Ripple Labs officially opposes the SEC’s move to file an appeal in a letter to U.S. Judge Analisa Torres. Source: Court Listener*

Stuart Alderoty, Ripple’s chief legal officer, explained that no “extraordinary circumstance” exists in the matter that warrants the Court to depart from normal legal procedure:

“There is no extraordinary circumstance here that would justify departing from the rule requiring all issues as to all parties to be resolved before an appeal.”

We oppose the SEC’s request for an interlocutory appeal. There is no extraordinary circumstance here that would justify departing from the rule requiring all issues as to all parties to be resolved before an appeal. https://t.co/hjNIwEZkSt
— Stuart Alderoty (@s_alderoty) August 16, 2023

On Jul. 13, Ripple scored a partial victory over the securities regulator regarding the securities status of XRP.

Torres ruled that the XRP token was not in itself a security. She said, however, that sales of XRP tokens can be securities in certain circumstances, such as when sold to institutional investors but not when sold on exchanges to retail traders.

Magazine: Crypto regulation: Does SEC Chair Gary Gensler have the final say?

Ripple case: SEC appeal unlikely as it gains from ‘current confusion’ — Haun Ventures CEO

July 17, 2023 Coin Telegraph

Analisa Torres

An immediate appeal could potentially jeopardize the SEC’s “entire enforcement agenda” if it ends up losing, said Katie Haun of Haun Ventures.

A former federal prosecutor turned chief executive of a crypto-focused venture capital fund says she would be “surprised” if the United States securities regulator lodges an immediate appeal against the Ripple case ruling, as it currently benefits from lack of “legal clarity.”

On July 13, Judge Torres granted a partial summary judgment in favor of Ripple Labs regarding XRP’s status as a security. At the time, a few commentators warned that an appeal from the SEC would be a possibility.

However, in a July 15 Twitter thread, Haun Ventures CEO Katie Haun explained that the securities regulator will likely stay quiet as it benefits from the “current confusion” and that losing an appeal could jeopardize its future enforcement actions.

Some non-legal advice musings on the Ripple decision, including two main takeaways:

1/ The Court drew a reasonable line and overall it's a good outcome for the industry. For other suits w/ the SEC, we believe the Supreme Court’s “major questions doctrine” will play a larger…
— Kathryn Haun (@katie_haun) July 15, 2023

“Anything is possible, but an immediate appeal seems unlikely both because the agency would have to ask the court to split this decision from the portion going to trial and because I’m skeptical the SEC actually wants legal clarity,” said Haun.

“The Commission benefits from the current confusion and losing these issues on appeal would jeopardize its entire enforcement agenda. So I’d be surprised if the SEC tried to appeal now.”

Haun is but the latest commentator to share the view.

On July 15, Ripple Labs CEO Brad Garlinghouse also believes it may “take years” before the SEC lodges an appeal. He added that an appeal by the SEC would only reinforce Judge Torres’ decision that XRP is not a security.

In a video posted on YouTube on the same day, U.S. lawyer and Ripple commentator Jeremy Hogan said he believes the SEC will launch an appeal after the trial between SEC and Ripple ends, which is scheduled for early 2024.

The SEC is currently suing crypto exchanges Binance and Coinbase over alleged violations of securities laws. Some believe the recent Ripple case ruling, while not a binding precedent, could have an impact on the outcome of the cases.

Meanwhile, many crypto commentators and lawmakers have called for Congress to take action and give legal clarity to crypto in light of the recent ruling.

Brian Quintenz, former commissioner of the Commodity Futures Trading Commission — now head of policy for venture capital fund a16z crypto — stated that the recent Ripple court ruling “only results in more uncertainty for entrepreneurs and builders.”

U.S. Senator Cynthia Lummis said the ruling underscores the urgent need for Congress to establish a clear and comprehensive regulatory framework for the cryptocurrency industry.

Magazine: Crypto regulation: Does SEC Chair Gary Gensler have the final say?

Bad news for Ripple? LBRY judge passes ruling on if secondary crypto sales are securities

July 12, 2023 Coin Telegraph

Analisa Torres

In January, lawyer John Deaton persuaded the Judge in the SEC vs LBRY case that secondary LBC token sales don’t constitute a securities offering.

Ripple may be holding its breath a bit longer after a United States District Judge refused to rule on if the secondary sale of LBRY Credits (LBC) constitutes a security.

On July 11, New Hampshire District Court Judge Paul Barbadoro made the ruling in the case the United States Securities and Exchange Commission (SEC) brought against the decentralized content platform LBRY.

The ruling may have offered legal precedent to fellow District Court Judge Analisa Torres, who is set to make a decision on the SEC’s case against Ripple in the coming months.

In his ruling, Judge Barbadoro said:

“Accordingly, I take no position on whether the registration requirement applies to secondary market offerings of LBC.”

A secondary market is where traders buy and sell securities, while a primary market involves trading from the company issuing the security directly.

John Deaton, a U.S. lawyer representing thousands of XRP (XRP) token holders, tweeted on July 11 that he contacted Judge Barbadoro to seek clarity on if LBC constituted a security.

Judge Barabadoro ultimately decided to uphold his “judicial restraint,” Deaton said.

I asked the Judge to clarify that the token itself is not the security just as Judge Castel did in Telegram. He declined to do so because he said that specific issue wasn’t litigated and he believes in exercising judicial restraint. He wrote: “it suffices to say that merely… https://t.co/xR9AemS5Hq
— John E Deaton (@JohnEDeaton1) July 11, 2023

Judge Barbadoro’s latest opinion is an about-turn from what he concluded in a January appeal hearing where Deaton persuaded him that the secondary sale of LBC doesn’t constitute a securities offering.

The New Hampshire Judge clarified in the appeal hearing that LBC is only considered a security when the sale is made directly.

The SEC also admitted that secondary market LBC sales don’t constitute a security.

While the SEC won a summary judgment in November 2022, it elected to settle for $22 million at an appeal hearing on Jan. 30.

In May, the SEC revised the figure and instead asked the court to impose a fine of $111,000 citing LBRY’s “lack of funds and near-defunct status.”

Meanwhile, Jeremy Hogan, a U.S.-based Attorney and Ripple advocate, told Cointelegraph that District Court Judge Analisa Torres will likely lay out her ruling within the next couple of months.

“We'll have the big picture sometime in the next two months and, unless Ripple completely wins, we'll know the details before the end of the year. If the details are bad then we will see appeals that will drag on for a long time.”

“But [that] won't really matter for a typical XRP holder,” he added.

The final ruling is out in the SEC v. LBRY case.

The Judge did not rule on secondary sales (or, not surprisingly, the Major Questions Doctrine). He enjoined further violations and issued a penalty.

Is a similar result possible in the Ripple case? https://t.co/6bOl34UKpo
— Jeremy Hogan (@attorneyjeremy1) July 11, 2023

Magazine: Crypto Twitter Hall of Flame: Pro-XRP lawyer John Deaton ‘10x more into BTC, 4x more into ETH

Ripple Objects to SEC’s Latest Push To Block Crucial Evidence in XRP Lawsuit

July 23, 2022 The Daily Hodl

Analisa Torres

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