Crypto lawyers are seemingly divided over the significance of a recent court order from Judge Analisa Torres, who denied the United States Securities and Exchange Commission’s (SEC) plan to file an interlocutory appeal against Ripple.
While many lawyers and commentators chalked the decision up as a substantive win for Ripple in its case against the regulator, other legal experts have urged the public to temper their enthusiasm.
Torres denied the SEC’s interlocutory appeal based on the grounds of her previous ruling, which sided partially in favor of Ripple. She said this did not necessitate an order that “involved a controlling question of law,” which is an essential condition for approving an interlocutory appeal.
Breaking: Judge rejects SEC’s motion to file an appeal against Ripple ruling
— Cointelegraph (@Cointelegraph) October 3, 2023
An interlocutory appeal is simply an appeal made during a trial, which, in this case, is the proceedings by the SEC against Ripple, its CEO Brad Garlinghouse and executive chairman Christian Larsen.
Bill Hughes, a lawyer at blockchain firm ConsenSys, told Cointelegraph that the rejection of the SEC’s appeal was something he’d expected, explaining that it’s not typical for such an appeal to make it through during this part of a trial.
On the other hand, crypto lawyer Jeremey Hogan was more confident that the decision was a “disaster” for the SEC. Hughes, however, disagreed.
The SEC's motion for interlocutory appeal DENIED.
— Jeremy Hogan (@attorneyjeremy1) October 4, 2023
Which means, the case either goes to trial in April, or goes away.
AND, this Order allowed the Judge to explain parts of her ruling even better, making appeal that much harder for the SEC to win.
Disaster for the agency. https://t.co/y1Gz8LolrG pic.twitter.com/hkktKMD4Ut
“The court says that [Torres’] ruling is limited to this case. Frankly, that’s fine for the SEC if they don’t mind one case not telling you very much about the next,” Hughes explained.
Similarly, Gabriel Shapiro, general counsel at Delphi Labs, warned crypto advocates to temper their excitement over the ruling, explaining that the decision wasn’t an all-out loss for the SEC.
In an Oct. 3 post on X (formerly Twitter), Shapiro said that while the SEC’s motion for an appeal had been denied in this instance, the SEC could still appeal the case later.
don't get too excited about the denial of SEC's interlocutory appeal in Ripple...it doesn't mean the SEC "lost its appeal"...it means that if the SEC wants to appeal it has to appeal everything at once after the trial...
— _gabrielShapir0 (@lex_node) October 3, 2023
still, some useful clarifications of Torres' opinion
“It doesn’t mean the SEC ‘lost its appeal’... it means that if the SEC wants to appeal it has to appeal everything at once after the trial,” he said.
Still, as Scott Chamberlain, an entrepreneurial fellow at the ANU College of Law, explained, the decision may prove more significant for Ripple than others are willing to give credit for.
“Yes, the SEC can appeal later, but it is stuck with [a] shitty factual record that makes successful appeal much more difficult,” Chamberlain wrote.
Related: Ripple gets formal approval for Singapore payments license
Chamberlain added that any future appeal from the commission would most likely be heard in the Supreme Court as there are no major legal questions left to decide. All that’s left is the “difficult but ultimately mundane task of applying known law to a complicated fact matrix that doesn’t support the SECs claim.”
“The law didn’t change. SEC failed to prove its case. Now it has to push shit uphill with a pointy stick if it wants to win.”
Ripple CEO Brad Garlinghouse also added his take to the mix, taking to social media to express his enthusiasm.
The SEC’s request to file an interlocutory appeal is DENIED. I’m not a lawyer but it seems the Court just told the SEC: You asked me to apply the “Howey” test, I did, and like it or not, you lost. https://t.co/0E4MS0iuRY pic.twitter.com/bkhCpum17n
— Brad Garlinghouse (@bgarlinghouse) October 4, 2023
As set out in the most recent court order, the trial on the matter is currently scheduled for April 23, 2024. If the SEC wishes to lodge an appeal, it must do so after the trial has concluded.
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