Ripple vs. SEC: The Battle Over XRP's Legal Status Continues

Lawyers acting on behalf of Ripple in its ongoing lawsuit with the U.S. Securities and Exchange Commission (SEC) have thrown a curveball

by Faruk Imamovic
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Ripple vs. SEC: The Battle Over XRP's Legal Status Continues
© Getty Images News/Dan Kitwood

Lawyers acting on behalf of Ripple in its ongoing lawsuit with the U.S. Securities and Exchange Commission (SEC) have thrown a curveball. They argue that the regulatory body has not sufficiently met the criteria needed to forward a request for an appeal.

Ripple's legal representatives, in a recent submission to the U.S. District Court for the Southern District of New York, pointed out that the SEC's urge to appeal was largely driven by its discontent with a prior judgment. Specifically, a decision which declared that the XRP token did not qualify as a security when sold to retail investors.

The core argument of Ripple’s team rests on the fact that the exceptional circumstances warranting an interlocutory appeal are conspicuously absent in this scenario. "Ripple joins that opposition,” the company stated emphatically, following their assertion that, “The SEC has not even attempted to meet the standard for a stay, even after the Individual Defendants identified that omission in their pre-motion letter”.

Repercussions and Ripple's Response

This legal tug-of-war began in December 2020, when the SEC filed a lawsuit against Ripple and two of its top executives: CEO Brad Garlinghouse and co-founder Chris Larsen. The fallout from this move saw many crypto exchanges, in a bid to sidestep potential legal complications, delist the XRP token.

But in a twist following Judge Torres’ ruling, many of these same entities indicated a change of heart, suggesting they might reconsider their position on the token and possibly reintroduce it. Garlinghouse did not mince words in expressing his discontent with the regulator's stance. “It’s sad that so many in the US crypto community have to resort to the legal process to prove this SEC is out of control and consistently wrong on the facts and the law,” he remarked in a post dated August 29.

What's Next for Ripple?

Despite the back-and-forth legal maneuvering and the challenges facing Ripple, the end is not yet in sight. Judge Torres has indicated that the SEC-Ripple face-off will be subjected to a jury trial, with proceedings expected to kick off in the second quarter of 2024.

As the crypto community and investors worldwide keenly observe, the implications of this lawsuit could reshape the regulatory landscape for digital assets in the U.S. and beyond.

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