Sep 5, 2023

Ripple argued in a Friday filing that the U.S. Securities and Exchange Commission (SEC) hasn't made enough of a case to warrant an appeals court intervention in its ongoing legal fight with the crypto company.

Video transcript

We are now turning to Ripple who argued in a Friday filing that the SEC hasn't made enough of a case to request for an appeal. Joining us now to discuss this coin desk, global policy and regulation, managing editor Nick Day who is also the editor of coin desks, state of crypto newsletter. Good morning, Nick. Good morning. All right, nice to see you after that long weekend. I hope you are rested and ready for a week. I hope not full of ups and downs, but here's to hoping. All right, let's talk about this uh ripple filing. What happened? Yeah. So, you know, as we've been talking about the SEC uh said it wanted to appeal the ruling in its case against ripple, which found that while ripple violated securities laws in, you know, selling institutional uh selling XRP to institutional clients, uh it did not do so in putting it on exchanges through programmatic sales. Um the SEC filed, it's, you know, uh I guess the second, you know, bullet on that Salvo uh a couple of weeks ago saying that, you know, the case a is going to be presidential, there's already some disagreement between judges, you know, et cetera. Uh, on Friday, ripple fired back saying that, you know, there isn't really that much disagreement between judges. They're looking at different things and the different cases and the ripple, uh, ruling does not have any kind of, uh, what they could describe as controlling interests in law or in the order, uh, that might warrant a appeal to, you know, appeal court to review it. So the argument kind of boils down to saying that the SCC hasn't made enough of a case that would, uh you know, warrant an appeal from the appeals court. They're not really, uh they're going into the substance a little bit of the ruling itself, but they seem to be more focused on, you know, is the appeals court going to be interested in this? Um And their position is, uh it does not look like it. You know, I asked Jack this in the last segment when we were talking about FTX, but is this just regular legal process? Is it normal to have this back and forth when there is a ruling like this? Yeah, this is, uh you know, I think as soon as the ripple, you know, ruling came out, everyone expected that the SCC was going to appeal. We've known uh for quite a while that the SCC would appeal. They hinted as much in a filing in a case against Terraform labs in, I wanna say mid to late July. So we've known for, you know, well, over a month that this is gonna be, is going to be a thing the SEC has until this Friday to respond to Ripple's filing. My guess is they're going to disagree with Ripple's arguments. And, um, you know, it's, we'll see what they say, but so far, at least the judge overseeing the case has said, you know, the SEC has the right to at least apply for an appeal. If she signs off, then they can try and take it to the second Circuit Court of appeals and see if the circuit court will take it up. If they do, then, you know, profit raises. But this right now, we're all still kind of the procedural part of this. Um You know, the SCC wants to appeal ripple does not believe an appeal is necessary and that's pretty much how we're looking at it. Nick, I've asked you this before, but just to wrap this story up into a nice little bundle, how might this back and forth or how might an appeal affect other cases that are now referencing? Um, the verdict here in the ripple case. So the like really basic fundamental idea that we're trying to figure out is do things like token sales fall under federal securities laws. And the SEC has said yes, everything here is security, uh you know, whatever you're doing probably violates the law and crypto companies have said, are you crazy? No, this does not look like it because, you know, it's a different format or different function or, uh you know, securities laws are 80 years old and don't really capture the nuances of uh technology that was born in the last 15 years. Um I don't know if an appeal of this case will go quite so far as to actually create a definition for, you know, that particular conflict, but it might get one step closer to doing so. Uh, and, you know, of course, that's definitely going to be of interest to all of the other companies that are currently facing sec lawsuits or even, uh, lawsuits from, you know, just the general public that are suing saying that, oh, you know, this token issue or whoever violated securities law in selling the token. All right, Nick, we are going to leave it there. Thanks so much for joining. Thank you. That was Coindesk Global Policy and regulation. Managing editor Nick Day. Don't forget to sign up for the state of crypto newsletter on Coindesk dot com.

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