“Crypto attorneys assert ‘XRP is not a security’ in response to Ripple’s case during SEC appeal”

As the United States Securities and Exchange Commission (SEC) pursues an interlocutory appeal in its litigation against Ripple Labs, attorneys in the cryptocurrency sector have expressed optimism regarding Ripple’s position, with some emphasizing that the XRP (XRP) token does not qualify as a security.

On August 9, the SEC dispatched a letter to Judge Analisa Torres indicating its intention to appeal the court ruling, which it believes merits reconsideration by an appellate court. The SEC requested that the judge suspend the case while the appeal is underway.

The SEC’s decision to appeal has raised inquiries among community members, with some speculating that this action is an attempt to contest the “non-security” classification of XRP. However, legal experts in the crypto field reassured the community that this is not the case.

Crypto attorney Jeremy Hogan stated that the two matters are distinct. Hogan clarified that if the SEC prevails in the appeal concerning sales, Ripple would be unable to conduct sales via exchanges. Nevertheless, he contends that exchanges could maintain XRP listings as long as Ripple is not involved in the sales.

Lawyer Jeremy Hogan’s insights on the Ripple case. Source: Twitter

In light of the SEC’s recent actions, Cointelegraph contacted crypto attorney Oscar Franklin Tan, the chief legal officer of the nonfungible token (NFT) platform Enjin, to elucidate some of the complexities surrounding the SEC’s appeal.

Tan noted that appeals typically occur after a case has concluded. However, in this instance, the SEC’s appeal is interlocutory, meaning they seek to appeal even though the case remains unresolved.

The SEC does not possess the “right” to appeal at this moment, which is why they are requesting permission to file an “interlocutory” appeal. Ripple will submit its response to the Court next week. Stay tuned. https://t.co/zCeVZhYfxc

— Stuart Alderoty (@s_alderoty) August 9, 2023

When asked about the potential impact of this appeal on the case’s trajectory, Tan informed Cointelegraph that it revolves around the momentum. He elaborated:

“The SEC is requesting to pause the XRP case while the interlocutory appeal is ongoing. If the appeal is granted, the party that wins the appeal gains momentum in the main case.”

While Hogan is of the opinion that the appeal will not alter XRP’s classification as a non-security, Tan believes that this remains the SEC’s objective. Tan asserts that the SEC is still aiming to overturn the ruling that determined XRP is not a security in July.

Related: Ripple joins BIS cross-border payments task force

Tan further explained that currently, the SEC is leveraging the outcome of the Terraform Labs case against the judge in the XRP matter. The crypto attorney stated that the SEC is contending that a higher court should “break the tie” among the varying conclusions. However, Tan opines that the SEC should allow the court process to unfold as intended. He stated:

“What the SEC ought to have done is provide clearer guidance prior to initiating legal action against anyone. Since Ripple and other entities opted to challenge the SEC in court for this guidance, the SEC should permit the court process to proceed as normal.”

Meanwhile, Ripple’s chief legal officer Stuart Alderoty advised the community to “stay tuned” and mentioned that Ripple will file its response with the court next week.

Magazine: SEC reviews Ripple ruling, US bill seeks control over DeFi, and more: Hodler’s Digest