SEC Counters Ripple in Effort to Appeal Groundbreaking XRP Ruling

The Securities and Exchange Commission has further argued the need for a mid-case appeal over the finer points of law.

AccessTimeIconSep 8, 2023 at 9:46 p.m. UTC
Updated Sep 11, 2023 at 3:02 p.m. UTC
Drive the Crypto Policy Conversation Forward
October 24, 2023 • Convene • Washington D.C.Where the industry establishes the digital economy’s legal, regulatory and compliance best practices for the future.Register Now

Whether or not Ripple violated securities law in making XRP available to retail investors by putting it on crypto exchanges is absolutely a question that needs appeals court intervention, the U.S. Securities and Exchange Commission (SEC) argued Friday.

The SEC filed a response to a Ripple memo which argued the opposite as part of its ongoing case against the crypto company closely affiliated with the XRP cryptocurrency. While Ripple argued last week that the SEC hadn't made a sufficient argument to warrant an appeal, Friday's filing pushed back forcefully.

"The Defendants themselves say that the issues have industry-wide significance and are of special consequence," the filing said.

The SEC signaled its intent to appeal Judge Analisa Torres' ruling in the U.S. District Court for the Southern District of New York last month, asking the judge for permission soon after. The judge allowed the SEC to make its case, giving Ripple a September 1 deadline to present its opposition. Friday's filing is a response to Ripple’s opposition memo.

Judge Torres ruled in July that Ripple violated federal securities law in how it sold XRP to institutional investors, but that it had not done so with retail investors. Another judge in the same court, Judge Jed Rakoff, disagreed with the judgment when he ruled on a different case, also brought by the SEC. The regulator pointed to this in its first memo and Friday's filing as part of its bid to convince Torres to allow the so-called interlocutory appeal, allowing an appellate court to take up some legal questions while the case is still progressing in the original court.

"'[Judge Rakoff] did reject this Court’s legal conclusion that the existence of 'blind' trading platform-based transactions precludes the application of Howey, as a matter of law, under virtually identical facts (sales of the crypto asset by the issuer to investors on a platform in blind bid/ask transactions)," the filing said.

Should Judge Torres grant the SEC's motion, it will need to present its case before the Second Circuit Court of Appeals.

Getting the legal disputes settled by the appellate court now could speed up the resolution of the case in the long term, the SEC contended.

Edited by Jesse Hamilton.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Nikhilesh De

Nikhilesh De is CoinDesk's managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.

Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.