After much confusion and speculation, the Securities and Exchange Commission (SEC) has filed an appeal against its ongoing legal battle with Ripple Labs.
The appeal challenges part of a 2023 summary judgment by Judge Annalisa Torres, which ruled that Ripple’s sale of XRP tokens to retail investors on cryptocurrency exchanges did not violate U.S. securities laws. It is something.
Ripple executives targeted by SEC appeal
Although many observers expected the SEC to challenge the court’s verdict that programmatic sales of XRP did not meet the legal standard of an investment contract, the I decided to focus on the sides.
One of the areas covered by the appeal is that the offering and sale of XRP on Ripple’s cryptocurrency platform, as well as personal trading by its executives, including Brad Garlinghouse and Chris Larsen, violated securities laws. The court’s judgment is that it has not.
Regulators also objected to a ruling that found no securities law violations occurred when crypto payment companies distributed XRP in exchange for non-cash consideration.
The same ruling deemed Ripple’s institutional sales of XRP to be in violation of securities laws. The company was forced to pay a $125 million fine for its violations.
The SEC filed its notice of appeal on October 2, and the law gave it 14 days to file Forms C and D. These forms were expected to provide more information about which parts of Torres’ decision apply to the SEC. are fighting.
Late submissions cause controversy
Scheduled deadlines came and went with seemingly no action taken by regulators, sparking widespread speculation within the community and intentionally jeopardizing a long-running lawsuit against the crypto company. Many people wondered if this was the case.
Some experts suggested that failure to submit the required documents in time could result in an immediate dismissal of the appeal and an end to the SEC’s quest to overturn Judge Torres’ findings.
The apparent inaction was all the more surprising given the agency’s reputation for punctuality and the tremendous interest in the Ripple scandal.
When finally deposited, the SEC’s Form C was dated October 16, while the file stamp on the court filing was October 17, suggesting that the agency missed the deadline. The fact that it further fueled speculation about whether or not it happened also added to the intrigue. However, FOX journalist Eleanor Terret said the notice of appeal was filed on October 2nd and may have been listed on the document as October 4th, meaning the actual deadline is October 18th. It suggested it was 11:59 p.m.
In any case, legal experts like MetaLawMan say the 2nd Circuit Court of Appeals will now have to determine whether the SEC filing was made within the allotted time.
Ripple has seven days to respond to the request, and Chief Legal Officer Stuart Alderroti said he would respond next week.
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