The U.S. Securities and Exchange Commission (SEC) is looking to appeal a recent court decision that went against the regulator in its high-profile lawsuit against Ripple Labs.
On Friday, the SEC filed a motion asking Judge Analisa Torres of the U.S. District Court for the Southern District of New York for permission to appeal her ruling that Ripple’s programmatic sales of XRP did not violate securities laws.
SEC makes a formal request
Previously, Judge Torres said the SEC could present arguments for an appeal, which the regulator has now formally requested.
At issue is the judge’s determination that retail investors buying XRP on an exchange would not have the same expectations as institutional investors purchasing directly from Ripple. The SEC contends this is a key legal question with implications for other pending cases involving crypto assets.
In its filing, the SEC was careful to focus its appeal on the investment contract ruling rather than the status of XRP itself. The regulator stated that it was not arguing that the underlying asset was necessarily a security.
Ripple now has until September 1st to file a response to the motion for interlocutory appeal. If granted approval by Judge Torres, the SEC would then need to petition the Second Circuit Court of Appeals to hear the case.
The high-stakes lawsuit alleges Ripple and its executives raised over $1.3 billion through unauthorized XRP sales. A successful SEC appeal could potentially undo recent momentum favoring Ripple. The outcome may also influence other lawsuits where the SEC alleges illegal securities offerings involving crypto assets.
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