A judge has denied the U.S. Securities and Exchange Commission's (SEC) request to appeal the decision that Ripple did not violate securities laws by offering the token XRP to members of the public. Judge Analisa Torres ruled in July that the sale of XRP to the general public did not constitute a securities offering, but she determined that the sales of the token to institutional investors were securities.
The SEC accused Ripple of violating securities laws through an unregistered offering of XRP in a case that began in 2020. However, Judge Torres has now denied the SEC's request for an interlocutory appeal, stating that she does not believe an appeal would advance the litigation toward a conclusion and sees no "substantial ground for difference of opinion" about her previous findings.
The denial of the interlocutory appeal could have implications for other ongoing litigation between the SEC and crypto exchanges Binance and Coinbase, according to CryptoSlate.
Ripple CEO Brad Garlinghouse expressed his thoughts on the judge's decision in a social media post on X, formerly Twitter. He stated that the denial of the appeal seems to indicate that the court does not agree with the SEC's application of the Howey test, which is used to determine whether an asset is a security.
Ripple's Chief Legal Officer Stuart Alderoty also commented on the decision, saying that he believes the court's ruling in Ripple's case will "play well" for both Binance and Coinbase. He stated during an episode of TechCrunch's Chain Reaction podcast that the July ruling clarified that XRP is not a security and that the SEC has "no role" in regulating it.
With the judge's denial of the SEC's request for an appeal, Ripple and the SEC are now set to participate in a trial starting in April. The outcome of this trial will have significant implications for the regulation of cryptocurrencies and the SEC's authority in the industry.
