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Ripple Faces New Hurdle As Judge Torres Approves SEC’s Interlocutory Appeal

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In the ongoing legal battle between Ripple Labs and the US Securities and Exchange Commission (SEC), Judge Torres has granted the SEC’s request to file an interlocutory appeal.

The decision, based on a review of the parties’ letters dated August 9 and 16, 2023, marks a significant milestone in the case.

The SEC’s successful request means that the regulatory body now has the opportunity to present a compelling case to the Second Circuit.

However, it’s important to note that Judge Torres has only granted permission for the SEC to file the motion for an interlocutory appeal.

SEC Aims To Secure Favorable Outcome In Ripple Case

According to journalist Eleanor Terret, the recent development grants the SEC the opportunity to present its arguments before the appellate court. This presents a significant opening for the SEC to challenge the previous ruling by Judge Rakoff and seek a different outcome.

In the Terraform Labs case against the SEC, Judge Rakoff strongly disagreed with the defendants’ assertions and explicitly rejected the rulings in Ripple, including Judge Torres’s application of the Howey test.

In his decision, Judge Rakoff concluded that, at the Rule 12 stage, the SEC had effectively met its burden of alleging that the tokens issued by Terraform Labs qualified as securities.

However, the responsibility of presenting a compelling case for the appeal lies with the SEC. The SEC will need to provide robust justifications to support their appeal to Judge Torres.

The court filing has outlined a timeline for the appeal process. The SEC is required to file its motion by August 18.

Subsequently, by September 1, Ripple and its defendants will have the opportunity to file their opposition papers. The SEC will then have until September 8 to file a reply, if necessary.