Judge Torres Slams SEC Inconsistent Legal Theories in Ripple Case

Judge Analisa Torres slams the SEC over its shifting and inconsistent arguments as to its legal theories about Ripple’s other distributions of XRP.   

Crypto-Law, a US regulatory and legal platform for digital holders, has shed light on how Judge Analisa Torres criticized the SEC in her latest decision in the Ripple case. 

Judge Torres Criticizes SEC Shifting Arguments 

Recall that the court recently denied the SEC’s request to certify an interlocutory appeal in the case. Following the decision, Crypto-Law shared an excerpt from the ruling, showing how the court slammed the SEC over its shifting arguments. 

In footnote 6, Judge Torres stated that the SEC presented “shifting and inconsistent arguments as to its legal theories about Ripple’s other distributions.” It bears mentioning that Ripple’s other distributions of XRP are among the transactions the SEC seeks an appellate review.  

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According to Judge Torres, the SEC argued at one point that other distributions of XRP constitute offers and sales of unregistered securities because they were made in exchange for non-cash considerations. 

On the other hand, the regulator argued that other distributions were indirect sales of XRP to the public. The agency claimed that these transactions were conducted to create liquidity for the cryptocurrency and advance Ripple’s interest by attracting people to its technology. 

“It is unclear how these legal theories relate to the SEC’s position that Ripple gifted XRP to third parties, which the SEC did not charge in its complaint,” an excerpt of the ruling read. 

Court Previously Slam SEC 

Reacting, Crypto-Law noted that the judge “rapped the SEC for its shifting and inconsistent arguments.” It emphasized that Judge Torres’ comment is in line with Magistrate Sarah Netburn’s “admonition on the SEC’s lack of faithful allegiance to the law.” 

In Footnote 6 of her ruling today, Judge Torres rapped the @SECGov for “shifting and inconsistent arguments as to its legal theory about Other Distributions”. This is in line with Judge Netburn’s earlier admonition on the SEC’s “lack of faithful allegiance to the law.” 👇🏻 pic.twitter.com/qK2pKpnMSV

— CryptoLaw (@CryptoLawUS) October 4, 2023

As reported earlier, Judge Netburn pointed out the SEC’s hypocrisy, stating that the SEC is “adopting its litigation positions to further its desired goal and not out of faithful allegiance to the law.” 

She made the comment while denying the SEC’s motion to protect internal documents related to William Hinman’s speech.