US SEC cannot appeal Ripple Labs decision, judge rules
Sign up now: Get ST's newsletters delivered to your inbox
The SEC has accused Ripple Labs of illegally raising more than US$1.3 billion in an unregistered securities offering by selling its XRP digital token.
PHOTO: REUTERS
Follow topic:
NEW YORK – A federal judge on Tuesday refused to let the US Securities and Exchange Commission (SEC) appeal her recent decision involving Ripple Labs, a ruling that has been seen as a major defeat for the regulator in its effort to police cryptocurrency markets.
In her July 13 decision, United States District Judge Analisa Torres had ruled that the sale of Ripple Lab’s XRP digital token on public exchanges complied with federal securities laws because purchasers had no reasonable expectation of profit based on Ripple Lab’s efforts.
The SEC had sought permission to appeal Judge Torres’ findings about “programmatic” sales of XRP and about “other distributions” of XRP as a means of payment for services, saying that an appeal would be important to a “large number” of lawsuits.
But the judge found no “substantial ground for difference of opinion” about her findings, and did not agree that an appeal would materially advance the case towards a conclusion.
She also said her decision did not conflict with a July 31 ruling by US District Judge Jed Rakoff, who said the SEC had a “plausible claim” that Terraform Labs’ Terra USD token was a security when sold on public exchanges.
Judge Torres said Judge Rakoff had been considering Terraform’s motion to dismiss the SEC case, and was required to accept all reasonable inferences in the regulator’s favour.
A trial in the Ripple Labs case is scheduled for April 23, 2024.
In its December 2020 lawsuit, the SEC accused Ripple Labs of illegally raising more than US$1.3 billion (S$1.8 billion) in an unregistered securities offering by selling XRP.
The SEC has long claimed that many digital assets are securities, as are stocks and bonds, and that it has power to regulate them.
Its other lawsuits include cases against Binance, the world’s largest cryptocurrency platform, and Coinbase, the largest US cryptocurrency platform.
Judge Torres had found in July that only some XRP sales violated federal securities laws.
On Wednesday, Ripple Labs announced that its payment network Ripple has secured a full licence
