On July 13, 2023, District Judge Analisa Torres of the United States District Court for the Southern District of New York delivered her verdict in the legal battle between the SEC and Ripple Labs, initiated in December 2020.

The U.S. Securities and Exchange Commission had initiated legal proceedings against Ripple Labs and its top executives, Bradley Garlinghouse and Christian A. Larsen. The regulatory agency alleged that Ripple and its leadership had illegally issued and sold securities, violating Section 5 of the Securities Act of 1933. Additionally, the SEC accused Garlinghouse and Larsen of facilitating these unlawful activities carried out by Ripple.

Both sides had presented their summary judgment motions for the court’s consideration. After evaluating the case, the court issued a mixed ruling, partially approving and partially rejecting the motions from both the SEC and Ripple along with its executives.

Per the court’s decision, the SEC’s summary judgment motion was approved in relation to Institutional Sales but was rejected for other aspects. Conversely, Ripple’s summary judgment motion was approved concerning Programmatic Sales, Other Distributions, and the transactions conducted by Larsen and Garlinghouse. However, it was rejected in relation to Institutional Sales. The SEC’s summary judgment motion alleging aiding and abetting against Larsen and Garlinghouse was also turned down.

A Pretrial Scheduling Order released on August 9, 2023, disclosed that plans for a jury trial involving Ripple and its executives are in progress. Judge Torres has tentatively scheduled the trial for the period between April 1 and June 30, 2024. Moreover, on August 18, 2023, the SEC submitted a motion for interlocutory appeal, signaling its intent to continue the legal battle.

This has led some members of the XRP community to worry about how Judge Torres will deal with this motion. Speaking at the inaugural XDC Blockchain Innovation Conference (held August 25-26, 2023, in Austin, Texas), Deaton predicted that Judge Torres would reject the SEC’s appeal request. He anticipates that this decision means the SEC will have to wait till at least the end of 2025 to file a comprehensive appeal in the Second Circuit.

He said:

There is no appeal right now. All the judge did was allow them to write a motion for an appeal for an interlocutory appeal … I think she denies it. And when she denies it, they have to wait for the full appeal, which will be after the case — which will be sometime in late 2024 — which would take another 18 months, which would mean we would be into late 2025 before the Second Circuit could ever hear it, and XRP and the others would continue to have the clarity they have now.

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