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.

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Ripple’s Alderoty calls for probe into Bill Hinman and his infamous speech

June 14, 2023 Coin Telegraph

Bill Hinman

Stuart Alderoty is joined by a number of other high profile individuals calling for an investigation into the former SEC official.

Ripple’s chief legal officer Stuart Alderoty has called for an investigation into the motivations that led to former SEC official William Hinman delivering his now-infamous speech in 2018.

Alderoty’s demand for an investigation came as part of a June 13 Twitter thread following the public release of the Hinman documents. The documents revealed that Hinman’s speech was delivered despite warnings from other SEC divisions.

13/An investigation must be conducted to understand what or who influenced Hinman, why conflicts (or, at the very least, appearances of conflicts) were ignored, and why the SEC touted the speech knowing that it would create “greater confusion.”
— Stuart Alderoty (@s_alderoty) June 13, 2023

In the 2018 speech, Hinman asserted that Ether (ETH) is not a security as a result of it becoming “sufficiently decentralized,” before elaborating on what factors must be satisfied when making that determination.

Alderoty argued that according to the newly released documents, Hinman had ignored the warnings of other SEC officials suggesting “his speech contained made-up analysis with no basis in law,” and that the speech ended up sending confusing messages to the cryptocurrency industry regarding what constitutes a security.

Alderoty said that unelected bureaucrats should only apply the law rather than trying to create new ones, and added that “Hinman’s speech should never again be invoked in any serious discussion about whether a token is or is not a security.”

Ripple CEO Brad Garlinghouse joined Alderoty in his criticism of the regulator in a June 13 Twitter thread arguing that the decision to go ahead with the speech despite “so much pushback” was “unconscionable.”

It’s absolutely unconscionable that a regulator – when presented with so much pushback on what he was about to say / how he compiled this fake “test” in the first place – decided to move forward anyway, and throw an entire industry into chaos. https://t.co/9qzKOiPWsA
— Brad Garlinghouse (@bgarlinghouse) June 13, 2023

Speaking with Cointelegraph, pro-XRP lawyer and CryptoLaw founder John Deaton noted that he also believes an investigation is warranted, adding that the fact that Hinman had referred to the speech as the “Ether Speech” raised questions about what motivated the speech.

Deaton and Alderoty’s comments on Hinman’s motivations seem to reference Hinman’s alleged ties to the Enterprise Ethereum Alliance, an advocacy organization which seeks to drive the use of Ethereum blockchain technology.

Before and after working with the SEC, Hinman worked at the law firm Simpson Thacher & Bartlett LLC, which was a member of the Ethereum Enterprise Alliance.

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Ripple files final submission against SEC as landmark case nears end

December 5, 2022 Coin Telegraph

Coin Telegraph

The two-year-long battle between SEC and Ripple is approaching the end, with Ripple filing its final submission in its case against the US regulator on Dec. 2.

The most talked about crypto lawsuit involving the United States Securities and Exchange Commission (SEC) and Ripple is approaching its conclusion after a two-year-long battle.

On Dec. 2 the SEC and Ripple both filed redacted replies to each other’s opposition to motions for summary judgment.

Ripple argued in its motion document that the SEC has failed to prove that its offering of XRP between 2013 and 2020 was an offer or sale of an “investment contract” and therefore a security under federal security laws.

Ripple concluded the document by stating that “the court should grant Defendant’s Motion and should deny the SEC’s Motion.”

Stuart Alderoty, General Counsel of Ripple stated on Twitter on Dec. 3 that this is Ripple’s “final submission,” asking the court to “grant” judgment in its favor.

He also stated that Ripple is proud of the defense it has mounted on “behalf of the entire crypto industry,” noting that Ripple has “always played it straight with the court,’ taking a subtle swing at the SEC saying he “can’t say the same for our adversary.”

In another Twitter post, Alderoty continued to slam the SEC on Dec. 5 referred to it as a “bouncing regulator,” quoting two statements that he suggests are at ends with each other.

Follow the bouncing regulator.

“Howey provides a clearly expressed test for determining what constitutes an investment contract.” SEC 4/22/21

“Hinman’s speech provided thirteen expressly non-exhaustive factors that market participants could consider.” 12/2/22
— Stuart Alderoty (@s_alderoty) December 4, 2022

The ongoing legal dispute between SEC and Ripple began in December 2020 when the SEC initiated legal action against Ripple claiming it had raised $1.3 billion by offering Ripple’s native cryptocurrency XRP as unregistered securities.

In an earlier Nov. 30 Twitter thread, former federal prosecutor James Filan said there are just three issues left to resolve in the SEC vs Ripple case.

This includes the summary judgment motions, expert challenges and sealing issues regarding the “expert reports,” the Hinman documents and other material relied on by the SEC and Ripple in their motions.

The Hinman documents refer to the speech that William Hinman delivered at the Yahoo Finance All Markets Summit in June 2018, where he stated that Ether (ETH) was not a security.

Filan believes that Judge Torres won’t tackle the three big issues “separately,” instead she will” decide on everything together, and once she rules on the motions for summary judgment, “one big written ruling” will be released — likely “on or before March 31st, 2023.”

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Ripple, SEC case heads for conclusion after ‘summary judgment’ filed

September 19, 2022 Coin Telegraph

Brad Garlinghouse

Ripple argued that XRP profits came from “market forces of supply and demand” rather than any contract between Ripple and XRP token holders.

The U.S. Securities and Exchange Commission (SEC) and Ripple Labs have both called for a federal judge to make an immediate ruling on whether Ripple’s XRP sales violated U.S. securities laws.

In separate motions filed on Sept. 17 by Ripple and the SEC, both have called for a summary judgment in the U.S. District Court Southern District of New York.

Summary judgments are submitted to the courts when a party involved believes there’s enough evidence at hand to make a ruling without the need to proceed to trial.

Both parties have called on Judge Analisa Torres to make an immediate ruling as to whether Ripple’s XRP sales violated U.S. securities laws. Ripple has argued that the SEC has run out of answers to prove XRP sales constituted an “investment contract," while the SEC has held strong on its beliefs that it does.

Ripple CEO Brad Garlinghouse in a Twitter post on Sept. 17 said the filings made it clear that the SEC “isn’t interested in applying the law.”

“They want to remake it all in an impermissible effort to expand their jurisdiction far beyond the authority granted to them by Congress,” he said.

Today's filings make it clear the SEC isn’t interested in applying the law. They want to remake it all in an impermissible effort to expand their jurisdiction far beyond the authority granted to them by Congress. https://t.co/ooPPle3QjI
— Brad Garlinghouse (@bgarlinghouse) September 17, 2022

Meanwhile, Ripple general counsel Stuart Alderoty noted that “after two years of litigation” the SEC is “unable to identify any contract for investment” and “cannot satisfy a single prong of the Supreme Court Howey test.”

In its motion for summary judgment, Ripple claimed that the SEC’s case “boils down to an impermissibly open-ended assertion of jurisdiction over any transfer of an asset."

The motion also argued that the SEC cannot establish that XRP token holders could not “reasonably expect profits” based on Ripple’s efforts as there were no contract obligations between Ripple and XRP token holders.

On the other hand, the SEC’s own motion for summary judgment argued that there can be an “investment contract” without a contract, any rights granted to the purchaser, and without any obligations to the issuer.

But Ripple argued in its motion “that is not and should not be the law, because without these essential features there is nothing to which the Howey test can sensibly be applied.”

Ripple instead pointed to profits coming from “market forces of supply and demand,” something that the SEC “conceded” according to the Ripple motion.

The significance of this admission was highlighted by U.S. Attorney Jeremy Hogan in a Sept. 17 post on Twitter, stating that “these concessions are perfect for a summary judgment.”

Community reaction

The filing of the Ripple and SEC motions brought about mostly positive sentiment from the XRP community, with one Twitter user believing “the end is near”:

The end is near….Better make sure those bags are packed!!! #XRPArmy #xrpthestandard #Tothemoon https://t.co/9aUEex67V0
— Paul Macrae (@PaulMac_1975) September 18, 2022

The motion for summary judgment comes nearly two years after the SEC sued Ripple, former CEO Christian Larsen and current CEO Brad Garlinghouse in Dec. 2020 for allegedly raising $1.3 billion through unregistered securities sales through XRP.

If the court executes the summary judgment, the court ruling will have a profound impact on determining which cryptocurrencies constitute a security under U.S. securities laws.

The XRP token rose to highs not seen since July following the motion filing — reaching nearly $0.40, but has fallen slightly since then and is currently priced at $0.34, according to CoinGecko.