Ripple Executives Push Back Against SEC’s Bid to Halt Trial; What Next?

In a significant turn of events in the ongoing Ripple vs. SEC legal battle, Ripple’s top executives, Chris Larsen and Brad Garlinghouse, have taken a resolute stance against the U.S. Securities and Exchange Commission’s (SEC) move to halt trial proceedings.

This latest development follows the SEC’s bid to initiate an interlocutory appeal, aiming to address the status of Ripple’s programmatic XRP sales and distributions.

Ripple Executives Take a Stance

In a recent tweet, veteran attorney, James Filan revealed that Ripple’s leaders have taken a strong stance against the forthcoming interlocutory appeal by the U.S. Securities and Exchange Commission (SEC). While this move comes after Ripple’s earlier plea to the court to reject the SEC’s request, providing three distinct grounds for their stance;

1. Ripple argued that the court’s decision did not involve a crucial legal question.
2. It highlighted the absence of substantial grounds for conflicting interpretations by the SEC.
3. Ripple asserted that an immediate appeal would not aid in the timely resolution of the ongoing legal dispute.

By underscoring these arguments, the Ripple executive team asserts that the SEC’s pursuit of an interlocutory appeal is not justified by extraordinary occurrences, thus refusing to appeal to the court.

Will the Proceedings Be Halted?

Ripple’s top executives, Chris Larsen and Brad Garlinghouse, who are the defendants in the ongoing case, firmly opposed the SEC’s request for a pause in the trial.

The executives disagreed with the SEC’s desire to “stay the case” while awaiting an interlocutory appeal. Ripple’s legal team urged the court to proceed with the scheduled trial to address the SEC’s claims.

Previously, the SEC’s initial claim alleged that Brad Garlinghouse and Chris Larsen acted recklessly in the distribution of XRP by Ripple. Future on July 13, Judge Torres confirmed that the case would indeed proceed to trial. The trial is set for Q2 2024, with parties providing blackout dates for efficiency.

Following this, the SEC sought permission to file an interlocutory appeal against Judge Torres’ decision. This appeal targets the ruling on Ripple’s non-securities categorized programmatic XRP sales and distributions. The SEC also sought to “stay the proceedings” concerning the case against Ripple executives.

Key Factors in Play

Considering the SEC’s request for a “stay,” the executives have identified and presented four crucial factors that the court should weigh before departing from the standard statutory rule.

1. The court is urged to assess the likelihood of the SEC’s success in the appeal.
2. It should carefully consider the potential irreversible harm the SEC might face without imposing a stay.
3. The Ripple executives request the court to thoughtfully ponder how a stay would impact all parties involved.
4. Lastly, they underscore the importance of factoring in the public interest surrounding the matter.

Ripple’s executives contend that the SEC’s appeal is unlikely to succeed and won’t cause irreparable harm. Furthermore, they advocate for caution, highlighting that a stay would negatively affect the individual defendants. They stress that moving forward with the trial aligns with the public interest.