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Ripple Objects to SEC’s Request to Appeal Ruling on XRP’s Security Classification

Ripple Labs, the blockchain technology company, has objected to the Securities and Exchange Commission’s (SEC) request to appeal a federal judge’s ruling that the XRP token is not a security when sold to the public. Ripple filed a request with US District Judge Analisa Torres in New York, opposing the SEC’s plea.

Ripple argues that the SEC is hastily seeking an appeal on a legal question that applies to all digital asset cases, despite differences in factual and legal procedural postures across various SEC enforcement actions. The company emphasizes that there are unresolved issues in the case, such as determining whether the sales of XRP to institutional investors fall outside the SEC’s jurisdiction.

If the SEC’s appeal is granted, Ripple intends to challenge the judge’s ruling that classified the sales of XRP to institutional investors as securities transactions.

AI legalese decoder can assist in this situation by analyzing the legal language used in the case and providing insights and explanations to both Ripple and the SEC. It can help identify any ambiguous or complex terms, clarify legal arguments, and assist in formulating effective strategies for both sides.

SEC Seeks to Pause Lawsuit Against Ripple

In addition to their appeal, the SEC is also seeking to pause its lawsuit against Ripple, which accuses the company of offering unregistered securities, until the appeal is resolved.

The ruling in July by the District Court for the Southern District of New York favored Ripple by stating that selling XRP on digital asset exchanges does not constitute an investment contract. However, the court also ruled that XRP is a security when sold to institutional investors, as it met the conditions set in the Howey Test.

The SEC argues that an immediate review is necessary as the outcome of this case may impact other cryptocurrency-related lawsuits, including ongoing suits against major players such as Coinbase Global Inc. and Binance Holdings Ltd.

Notably, another federal judge in Manhattan, Jed Rakoff, opposed Torres’s approach in a separate SEC case involving Terraform Labs and its founder Do Kwon. Rakoff concluded that the Terra USD token could potentially be classified as a security when sold to retail investors.

Ripple’s CEO, Brad Garlinghouse, and Chairman, Christian Larsen, who are named defendants in the case, have also opposed the SEC’s request. They maintain that Judge Torres made the correct decision and argue that proceeding to trial is in the best interest of the public.

SEC Faces Another Setback as Court Rules in Favor of Grayscale

Shortly after Ripple’s objection, the cryptocurrency industry gained another victory against the SEC. An appeals court in Washington overturned the SEC’s decision to block Grayscale Investments LLC’s proposed spot Bitcoin exchange-traded fund.

The court ordered the SEC to set aside its earlier rejection of GrayscaleÔÇÖs application and reopen the review process. The court stated that the SEC’s denial of Grayscale’s proposal was arbitrary and capricious due to its failure to explain its different treatment of similar products.

In conclusion, the AI legalese decoder can assist Ripple in navigating the complex legal landscape and developing a strong defense strategy against the SEC’s appeal. It can provide valuable insights by deciphering legal jargon, identifying key arguments, and offering guidance based on previous rulings and legal precedents.

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