The U.S. Securities and Exchange Commission (SEC) on Friday resisted Ripple Labs’ efforts to block its appeal of a judge’s decision that largely favored the cryptocurrency company in its legal battle with the regulator.
In the new court filing, the SEC argued that U.S. District Judge Analisa Torres’ summary judgment in July raised “exactly the kind of ‘complicated legal questions'” that warrant interim or preliminary review by a federal appeals court under a law that certain Decisions must be appealed before the conclusion of proceedings.
The SEC wants to challenge Torres’ conclusions that programmatic and institutional sales of Ripple’s XRP digital token were not securities offerings requiring registration with the regulator. The judge ruled that only certain institutional sales made by Ripple under investment contracts were unregistered securities transactions.
“The essence of (Ripple’s) argument is that an appeal under Section 1292(b) is not possible because the issues at issue require the application of the law to undisputed facts on the record and because an appeal would not end the litigation,” said the court. SEC. “It is not so”.
The regulator argued that case law allows appellate courts to review the legal tests applied by district judges, such as those used to determine whether something is a security. He also rejected Ripple’s claim that a preliminary appeal must completely end a case to be allowed.
“Interim appeal is the route that most efficiently achieves this goal,” the SEC said, predicting that its proposed appeal would expedite the completion of the case compared to Ripple’s preferred route of pursuing more preliminary proceedings in district court.
In its filing last week, Ripple said the issues the SEC is seeking to appeal are “fact-bound” and inappropriate for interim review. He also argued that an immediate appeal would not speed resolution of the case.
“The SEC does not create any of the three conditions required to certify an interim appeal. “This court should follow the Second Circuit’s instruction that application (of the statute) “must be strictly limited to the precise conditions set forth in the statute” and deny the SEC’s petition for certification,” Ripple wrote.
The company added: “That’s all the SEC is trying to accomplish here. The SEC’s assertion that this court reached an incorrect conclusion in applying Howey to the facts of this case does not demonstrate a disagreement over an underlying rule of law justifying certification.”
The SEC sued Ripple and two of its executives in December 2020, alleging they raised more than $1.3 billion by illegally selling XRP as an unregistered security. Both sides filed motions for summary judgment this year after the discovery process concluded.