SEC Loses Motion for Appeal Against Preliminary Ripple Judgement

There has been yet another win for Ripple Labs in its legal action with the SEC, as a federal judge just dismissed the regulator's request for an appeal. This sets the stage for a final showdown in April regarding the company's operations in the United States. The company also recently obtained its Singapore license, cementing its commitment to expand in the Asia Pacific sector.

Another Win for Ripple

On Tuesday, District Judge Analisa Torres declined the U.S. Securities and Exchange Commission's request to appeal her previous ruling in the Ripple Labs case. Judge Torres had determined in July that the sale of Ripple's XRP digital token on public exchanges adhered to federal securities laws as purchasers did not anticipate profit from Ripple's efforts. This was only a partial win for Ripple, as XRP was still considered a security for institutional investors.

The SEC was granted permission to file an interlocutory appeal in mid-August. In response, Ripple had argued that the appeal lacked valid grounds. The tech giant had suggested that the motion would not expedite the case's conclusion and questioned the SEC's intent to continue the lawsuit after an appeal victory. Ripple had then urged the court to deny the SEC's request for a potential stay of proceedings, stating that it didn't meet the necessary standard.

Regarding the motion dismissal, the judge pointed out that the issues in this case involve complex factual and economic analyses, making them unsuitable for an immediate appeal. The SEC, it said, failed to provide conflicting authority or substantial grounds for a difference of opinion. Furthermore, allowing an interlocutory appeal would likely prolong the litigation with multiple rounds of review, delaying the resolution. Instead, the court believes the case should proceed to judgment, allowing a single round of appellate review on a complete record.

The SEC's ongoing litigation against Ripple Labs will therefore continue as scheduled, with the trial set for April 23, 2024.

The regulator retains the option to appeal the case following the trial's conclusion and the issuance of a final judgment. This enables both participants to present their arguments and evidence in a higher court if they are unsatisfied with the trial's outcome, addressing any relevant legal issues or claims.

Judge Torres' decision highlights the complexity of legal disputes in the cryptocurrency space, impacting the classification of digital assets as securities and the application of securities laws. The trial has been a burning topic among the community as it holds significant implications for the regulatory framework for digital assets in the United States going forward, and could serve as an example on a global level.

Ripple Secures Singapore License

Ripple Markets APAC Pte Ltd, Ripple's Singapore division, obtained its license from the Monetary Authority of Singapore on Wednesday, allowing the company to continue offering digital payment token services in the region. This development marks another milestone for Ripple, which had already received preliminary approval in June. The XRP issuer's Asia Pacific headquarters have been based in Singapore for the past six years. Ripple is committed to expand its activities in the region, and has actively communicated with local policymakers and regulators from the beginning. Some of its key executives will discuss further plans for responsible trading and development of digital assets at the Elevandi Insights Forum and the Singapore Fintech Festival from November 14 to 17, this year.

Ripple CEO Brad Garlinghouse declared that “Singapore has developed into one of the leading fintech and digital asset hubs striking the balance between innovation, consumer protection and responsible growth.” Notably, about 90 percent of the firm's business activity takes place outside of the United States.

Trading activity surged following the announcement, reaching $1.7 billion in daily trading volume, a notable increase from Tuesday's $900 million, as reported by CoinGecko. XRP is trading at around 52 cents at the time of writing.

Timeline of events

Check out our coverage of the entire case:

October 4: Ripple's Singapore subsidiary obtained its license to operate in the country. The trading volume of XRP nearly doubled.
October 3: Judge Torres dismissed the SEC's request for an interlocutory appeal, as it does not meet the exceptional circumstances necessary.

September 8: The SEC's deadline to file its response.
September 1: Ripple filed its response to the appeal and stated that the SEC lacked any legal grouds for the appeal to be successful or relevant.
August 18: Court deadline for the SEC to file its appeal.
August 15, 2023: Judge Torres granted the SEC's request to file an interlocutory appeal. She also filed a notice of appearance for an investment banker declarant.

July 13: Judge Torres ruled that XRP is not a security in the case of programmatic sales but that the token does meet the definition of security for sales made to institutional investors. This decision has prompted various crypto exchanges, including Coinbase, Gemini, Kraken, and Bitstamp, to announce plans to list Ripple's token on their platforms, indicating growing acceptance and positive momentum for the broader crypto market.

June 13: The Hinman documents were expected to be released.
June 5: The SEC removed Hinman's biography from its website.
May 19: Reports emerged that the SEC and Ripple filed a joint letter requesting an extension to submit the Hinman speech.
May 16: Judge Torres rejected the SEC's motion to keep the Hinman speech sealed.

April 18: SEC Chair Gary Gensler testified at a congressional hearing without revealing whether ether was considered a security.
April 16: John E. Deaton shared a 2018 video featuring Tim Draper and Gary Gensler discussing potential lawsuits and the influence on financial regulators.
March 6: Judge Torres issued an initial ruling excluding expert testimony from the summary judgment process in Ripple's legal battle with the SEC.

March 3: Ripple filed a Supreme Court letter to Judge Torres.
January 2023: Multiple organizations, including Coinbase, submitted amicus briefs in support of Ripple.
November 30, 2022: SEC and Ripple submitted final submissions to the summary judgment motions.
November 7, 2022: The LBRY blockchain lost a similar case against the SEC, resulting in a decline in XRP's value.
September 2022: Both the SEC and Ripple filed motions for summary judgment.
January 24, 2022: Judge Netburn granted the SEC until February 17 to appeal her decision regarding sensitive government documents in the case.
August 31, 2021: Ripple filed a motion requesting the SEC to disclose its internal crypto trading policies.
June 14, 2021: The SEC's deadline for disclosing internal crypto trading policies was extended.
April 13, 2021: SEC Commissioner Hester M. Peirce published the Token Safe Harbor Proposal 2.0.
March 22, 2021: Judge Netburn distinguished XRP from BTC and ETH in terms of currency value and utility.
March 8, 2021: The SEC requested an immediate hearing in response to Ripple's arguments.
January 1, 2021: XRP holders led by John E. Deaton contested the SEC's lawsuit, arguing that XRP is not a security.
December 21, 2020: The SEC filed a lawsuit against Ripple Labs, Garlinghouse and Larsen.