Ripple plans to thwart attempts by the U.S. Securities and Exchange Commission (SEC) to appeal the landmark decision of the crypto court.
In July, U.S. District Judge Analisa Torres ruled that the blockchain company’s own XRP token, when sold to the general public, does not belong to the securities category. The judge also granted the SEC the right to appeal this decision.
Ripple, in a statement that was filed with the court at the end of last week, said that the regulator currently intends to appeal what the company believes is an exclusively legal issue applicable to every digital asset case. The firm also noted that the grounds on which each case was formed were different, which eventually caused different decisions.
Ripple reported that the district judge’s ruling is based on written evidence that the company did not make any promises and offers to buyers as part of the sales program.
Another judge in the same court, Jed Rakoff, disagreed with Analisa Torres’ decision in his ruling on the case. The SEC drew attention to this when it filed the bulk of its appeal.
The initial decision of Analisa Torres was interpreted by many as a victory for the cryptocurrency industry in general and Ripple in the framework of a long confrontation with the commission. Teresa Goody Guillen, a former lawyer at the SEC’s Office of General Counsel and current partner at BakerHostetler law firm, said at the time that this result of the legal confrontation has the potential to change the landscape of the regulator’s enforcement efforts and could become a factor that significantly affecting the effectiveness of these efforts. Some experts also noted that the court’s decision is an important precedent for Coinbase and Binance, which have received a substantial argument for forming a line of defense against accusations that these companies act as unregistered brokers and securities exchanges.
A number of other legal experts admitted the possibility of expediency in interpreting the outcome of the proceedings as the fact that the process of selling tokens on retail exchanges is recognized as a non-investment contract. Jeffrey Alberts of Pryor Cashman LLP stated that the court rejected the definition of the mentioned accounting units as securities.
In July, Ripple CEO Brad Garlinghouse said that hundreds of people across the industry had informed him of widespread enthusiasm and excitement amid the SEC’s first case of loss in the cryptocurrency case. He also called the regulator a bully. The question of the nature and characteristics of the SEC’s actions in the proceedings against the crypto sector is controversial, but experts support the opinion that the agency launched a war against cryptography in 2023, paying increased attention to crypto assets.
In June, the regulator filed 13 charges against Binance, the world’s largest crypto exchange, and its founder Changpeng Zhao. The agency stated that this platform is an element of an extensive network of deception. Binance reported disappointment in connection with the accusations of the regulator. The company also noted that it cooperated with the SEC in the investigation, made efforts to eliminate problems, and hoped that the situation would be resolved through negotiations. Separately, Binance noted that the statements of the regulator should not be the subject of coercive actions.
Also in the summer, the SEC sued the publicly registered crypto exchange Coinbase. The regulator accused this company of giving customers the opportunity to trade unregistered securities. Coinbase, as well as Binance, have declared their intention to defend their rights and prove their non-involvement in illegal practices.
Amias Gerety, a partner at QED Investors, said during a conversation with the media that the crypto community has been unshakably confident for a long period that existing legal norms will not be applied to it since in this case, regulators are dealing with an innovative business space where traditional control mechanisms are not appropriate. He noted that such beliefs trigger the process of finding excuses for insubordination. At the same time, he said, the SEC’s track record of regulating enforcement has shortcomings. He also stated that the agency cannot independently write laws, stressing that each of its actions must be considered in court before obtaining the status of viable.
As we have reported earlier, Ripple CEO Says XRP Ruling Helps Company to Grow.
