The Securities and Exchange Commission (SEC) on Friday requested that a federal court allow it to appeal Ripple Labs’ partial victory ruling, which stated that XRP was not a security if sold to retail customers. The regulator filed the request just a day after the ruling judge, Analisa Torres, said it could argue the preliminary ruling.
According to reports, the SEC asked Judge Torres to certify an interlocutory appeal as the ruling was preliminary and not the final judgment in the case. Once the judge allowed for the argument, the SEC immediately filed the request, citing that the initial ruling would affect other cases involving digital assets.
SEC Set to Contend Ruling
The SEC has always stated its intention to appeal the case, pointing out that the Ripple ruling was wrongly decided. Particularly, the regulator is looking to appeal the part of the ruling that states that XRP did not violate securities laws when sold to retail traders because they do not have similar expectations as institutional investors.
The SEC also cited that a different court disregarded Torres’s ruling, refusing to consent to the ideology that the same token, when sold to retail traders, would possess distinct qualities as when acquired by institutional traders.
“Since this Court’s decision, another court in this district explicitly disagreed with the Order’s ruling on the Programmatic Sales. The Court declines to draw a distinction (where) coins sold directly to institutional investors are considered securities and those sold through secondary market transactions to retail investors are not because Howkey makes no such distinction,” the filing stated.
Terraform Labs sought to dismiss its court case against the SEC, citing Ripple’s partial victory ruling. However, a Manhattan federal judge, Jed Rakoff, rejected the verdict, stating that XRP may still be a security when sold to secondary investors.
Ripple Responds
Ripple’s lawyer questioned the SEC’s eagerness to appeal an unconcluded case, noting that there were no extraordinary circumstances warranting its intended argument. According to the representatives, resolving a ruling before the final trial and decision-making is unnecessary.
Ripple has until September 1 to respond to the SEC’s appeal motion, to which the regulator will respond on or before September 8.
