Representatives of the U.S. Securities and Exchange Commission (SEC) appealed the ruling in the case against Ripple Labs, citing a controversy in the proceedings against Terraform Labs.
The SEC sent an official letter to Judge Analisa Torres requesting an interlocutory appeal of the already ruled decision regarding the XRP token. While the appeal is being considered, the regulator asks to suspend other processes against Ripple Labs, as the outcome of the revision may affect it.
The regulator refers to a recent decision in a lawsuit against Terraform Labs by Jed Rakoff, Judge of the U.S. District Court for the Southern District of New York. Torres’ colleague didn’t grant Terraform Labs’ motion to dismiss the SEC’s lawsuit, the materials of which referenced, among other things, the decision in the case against Ripple. Rakoff gave a detailed interpretation of the Howey Test and effectively refused to recognize Torres’ ruling, stating that cryptocurrencies traded on exchanges can also be securities. The resulting contradiction was pointed out by the SEC in its letter.
Meanwhile, Analisa Torres plans to take the case against the founders of Ripple Labs, in which they’re accused of selling unregistered securities to institutional investors, to a jury trial. The hearing should take place no later than Q2 2024. This was reported by The Block. However, in light of the SEC’s appeal, the case’s submission to the court may be delayed.
According to the court decision of the U.S. District Court for the Southern District of New York, XRP wasn’t recognized as a security if sold to retail investors. But the court ruled that it was a security when sold to institutional investors, which led to further consideration of the charges against Brad Garlinghouse and Chris Larsen, Co-Founders of Ripple.
