XRP Soars As SEC’s Attempt to Appeal Landmark Ripple Ruling Is Denied

XRP surged almost 7% after the Securities and Exchanges Commission’s (SEC) motion to appeal and overturn its loss in the landmark Ripple ruling in July was denied.

Judge Analisa Torres said in an order filed on Tuesday that the SEC had failed to prove that the decision was sufficiently faulty or problematic.

“The SEC fails to meet its burden to show `substantial ground for difference of opinion’ as to the two holdings that it moves to certify for interlocutory appeal,” Torres said.

XRP Pares Gains

XRP has pared gains today and traded at $0.54 at 7am ET, up 3.9% since news of the ruling broke.

In the landmark July ruling, Torres had said that the direct sales of XRP to customers did not amount to offering unregistered securities, resulting in a significant loss for the regulator.

The SEC appealed that ruling in September on grounds that the summary judgment rendered by Torres raised `’knotty legal problems” that needed review before the case is concluded.

The SEC’s request to file an interlocutory appeal is DENIED. I’m not a lawyer but it seems the Court just told the SEC: You asked me to apply the “Howey” test, I did, and like it or not, you lost. https://t.co/0E4MS0iuRY pic.twitter.com/bkhCpum17n

— Brad Garlinghouse (@bgarlinghouse) October 4, 2023

While this deals yet another blow to the SEC and its regulatory approach, the ruling is not a complete loss. The order set a trial date for April 23 to address the case’s outstanding issues.

That will allow the regulator a chance to issue an overall appeal for all the issues and rulings if it so chooses.

Legal Experts Weigh In

Gabriel Shapiro, general counsel at Delphi Labs, cautioned cryptocurrency supporters to contain their enthusiasm over the verdict. He stressed that the outcome wasn’t a complete loss for the SEC which still had a chance to issue an overall appeal.

don’t get too excited about the denial of SEC’s interlocutory appeal in Ripple…it doesn’t mean the SEC “lost its appeal”…it means that if the SEC wants to appeal it has to appeal everything at once after the trial…

still, some useful clarifications of Torres’ opinion

— _gabrielShapir0 (@lex_node) October 3, 2023

On the other hand,  cryptocurrency lawyer Jeremey Hogan said the denial of appeal was a “disaster” for the SEC, especially since it enabled Torres to fortify her earlier partial ruling against Ripple.

The SEC’s motion for interlocutory appeal DENIED.

Which means, the case either goes to trial in April, or goes away.

AND, this Order allowed the Judge to explain parts of her ruling even better, making appeal that much harder for the SEC to win.

Disaster for the agency. https://t.co/y1Gz8LolrG pic.twitter.com/hkktKMD4Ut

— Jeremy Hogan (@attorneyjeremy1) October 4, 2023

Scott Chamberlain, a fellow in entrepreneurship at the ANU College of Law, said that while the SEC may appeal in future, it has a “shitty factual record that makes successful appeal much more difficult.”

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