The United States Securities and Exchange Commission (SEC) is seeking to challenge the verdict in its lawsuit against Ripple. It intends to argue against the ruling that the sale of XRP to retail investors does not classify it as a security.
The SEC argues that the verdict might impact its several other ongoing litigations against crypto firms, which all concern a similar aspect of US securities law. It is also debated that the verdict allows other defendants to leverage it as precedent.
SEC Requests a Second Review of XRP Verdict
The SEC has asked the court for an interlocutory review. This is requested when the court of appeals needs to decide on a question of law.
According to the SEC, an interlocutory review is justified in this situation. It argues that it could impact its other lawsuits – which are of similar nature – currently awaiting resolution. The outcome of this particular court case can serve as supporting evidence for the defendants.
“Interlocutory review is warranted here. These two issues involve controlling questions of law on which there is substantial ground for differences of opinion, as reflected by an intra-district split that has already developed”
On July 13, US District Judge Analisa Torres ruled that XRP is not a security when sold to retail investors – aka individuals – however, it is a security when sold to institutional investors. This result partially favored both the SEC and Ripple.
The SEC further explained that its pending cases are against issuers, like Ripple, who allegedly offered and sold investment contracts “on crypto asset trading platforms or for non-cash consideration.”
To Learn More About the SEC v Ripple case, read BeInCrypto’s Guide: Everything You Need To Know About SEC vs Ripple
The Ripple Verdict Will Have A Domino Effect
Crypto exchange Coinbase has already raised the Ripple verdict as part of its efforts to have the SEC case against the exchange dismissed. Coinbase recently cited the Ripple ruling 13 times in its motion against the SEC.
Coinbase was initially charged by SEC on June 6. The SEC alleged it “unlawfully” facilitated the buying and selling of crypto asset securities. In the Ripple filing, the SEC acknowledges that Coinbase has already referenced the verdict as supporting its own case.
“Indeed, the Coinbase defendants recently sought judgment on the pleadings citing extensively to the Order.”
It also states the decision could affect its ongoing legal battle against the Binance crypto exchange. The SEC similarly alleges that Binance broke various security laws, including selling unregistered securities.
The SEC also cites its legal action against Hydrogen Technology Corporation. It alleges the company had a role in offering unregistered offers and sales of crypto asset securities called ‘Hydro.’
The SEC has put forth a briefing schedule, requesting its opening brief to be on Aug. 18. This will be two days after Ripple’s response is due for this letter.
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