- District Judge Analisa Torres has rejected the SEC’s motion for an interlocutory appeal in the ongoing case against Ripple.
- The SEC failed to demonstrate that an appeal would advance the case, said Judge Torres.
- The court said any further appeals “would likely prolong the action.”
The court rejected the U.S. Securities and Exchange Commission’s (SEC) motion to file an interlocutory appeal in its case against Ripple, the company that issued XRP.
On October 3, District Judge Analisa Torres denied the SEC’s motion and stated, “The SEC fails to meet its burden to demonstrate that an interlocutory appeal would materially advance the ultimate termination of the litigation.”
In July 2023, Judge Torres ruled that the programmatic sale of XRP wasn’t a violation of securities law, which led the SEC to file an interlocutory appeal challenging the court’s decision. The court mentioned that they used the Howey test, which is “the SEC’s legal standard.”
The court mentioned several factors behind the denial, such as that programmatic buyers could not have known if their payments of money went to Ripple, Ripple didn’t make any promises or offers to the programmatic buyers, and many programmatic buyers were entirely unaware of Ripple’s existence.\
Furthermore, Judge Torris claimed that the SEC failed to provide evidence that Ripple’s promotional materials were distributed to programmatic buyers. Moreover, the SEC failed to provide evidence that programmatic buyers could parse through the documents to discern Ripple’s marketing campaign connecting XRP’s price to its own efforts.
Crypto lawyer John Deaton shared his enthusiasm for the ruling, and Brad Garlinghouse, CEO at Ripple, said, “I am not a lawyer, but it seems the court just told the SEC: You asked me to apply the “Howey” test, and I did.”
The filing said, “The SEC’s request for a stay is denied as moot.” However, the court stated that any party who disagreed with the court’s decision could file an interlocutory appeal, but that doing so “would instead likely prolong the action as it would be subject to multiple bites at the apple for appellate review.”
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