Aug 18, 2023

Judge Analisa Torres has let the U.S. Securities and Exchange Commission (SEC) argue it can appeal against her ruling that Ripple didn’t violate securities laws in making XRP available to retail traders by putting it on exchanges.

Video transcript

There's a new legal development in the sec case against ripple. Everyone's favorite topic. Joining us now to discuss this coin desk, global policy regulation, managing editor Nick Day, who is also editor of the state of crypto newsletter and the man standing between me and my two week vacation, Nick, what is the judge saying in the morning? I'll, I'll try not to interrupt to your vacation too much. Yeah. So, so Nick, what's going on in this case? What, what's happening uh with the uh ripple ruling? Yeah. So the SCC announced last week that it wanted to file an appeal against the ruling. It requested permission from the judge overseeing the case for uh basically they wanted permission to file a motion for leave to file the appeal. So uh if this is like a four step process, they just got past step one. OK. And, and, but like what's gonna happen ultimately? Like what, what for, for the average Joe who's watching this with uh bags of XRP and they're wondering what's going on? I believe they're called the XRP Army Lawrence. Yeah. So nothing immediate. So basically what happened was um the steps are this Right. First, the sec had to ask for permission. Basically request uh permission to uh for permission for a leave to file a motion for a leave to file the appeal. Uh Basically, they needed permission to file a thing saying, hey, we want to appeal this. Can we appeal it? The judge has said, ok, to that very first thing. Next, we're gonna file a motion saying, hey, we want to appeal, this judge is going to rule on that. Uh If the judge, OK? Is that? And says, yeah, you may uh appeal, then they have to go to the Fifth Circuit Court of Appeals or sorry, the second circuit Court of Appeals and say, hey, we want to appeal this ruling and the second Circuit Court of appeals has to say, OK, and then only then can uh the SCC file the actual appeal itself. So right now, I'd say there's probably nothing immediately. Uh you know, like there's nothing market moving happening as far as I can tell. It's just kind of, you know, this is a legal process. These are procedural things. Um We have no idea what the S ECs arguments are going to be yet. We don't know what the, you know, appeals court might rule yet. This is just a sort of very long process, what's uh ripple saying about all of this. So, uh ripple, uh General Counsel ST Aldi said on Twitter before yesterday's ruling that, you know, they don't think an appeal is necessary or warranted. Uh They don't think that, you know, the Se C's arguments meet the level of, uh, you know, qualification that the courts might look at. So I imagine, you know, they'll be continuing on this. Um Right now the timeline is, you know, the SEC has to file the appeal itself or sorry, file a motion for relief to file the appeal itself. Uh, and then ripple will have a chance to respond to that. Uh by um I believe it was September 1st. So about two weeks or so give or take, um, we'll have a better sense of what their arguments are after that. Uh And then we'll get another response from the SEC and then who knows, might get a hearing. Judge might rule just on the written documents hard to say. Yeah, this might take months. Well, the case itself began, you know, if you guys recall in December 2020 we're now in August 2023. So I, yeah, this is, this is a very long running case now, case that never ends Nick, I believe I've asked you this before, but just for our audience who doesn't watch us every day, could this appeal have any kind of effect on any of the other cases that have mentioned the ripple partial victory in their cases? For example, coin base has, has brought this up is the appeal gonna affect any of these other uh lawsuits. Yeah, if we get to the actual point where an appeal is being heard and, uh, you know, considered by the appeals court, um, it's very possible that the appeals court will either a side with the SCC, say that Judge Eli Tores from the southern district of New York was, you know, incorrect in saying that XRP on retail exchanges for retail investors, uh, was not sold in violation of securities laws by ripple, um, which would, you know, be pretty devastating. I think to some of the companies in cases that have argued that it is a precedent. On the other hand, if the appeals court sides with ripple and says, no, you're right. You know, uh, these are not securities laws that would be a pretty major boost because the appeals court rulings tend to be, uh, I guess a little bit more precedential, um, for court cases than, you know, a district court might be. So the potential here is definitely important. It's just a matter now of seeing a whether or not we even get to that stage and then, you know how the judges look at the arguments afterward. All right, Nick, it's time for Lawrence's vacation. We're not going to hold him up any longer. Thank you for joining the show this morning. Nick, have a great weekend and I will see you next week. See my man, the coin that was Nick Day, Coindesk Global Policy and Regulation. Managing editor. Don't forget to sign up for the state of crypto newsletter on coindesk dot com.

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