Terra Case Echoes in SEC’s Ripple Appeal Request

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The legal battle between the SEC and Ripple continues to twist and turn, with the SEC now requesting an appeal against Judge Analisa Torres’ ruling. The drama unfolds with references to another case involving Terra and conflicting judgments between two judges. Let’s break down the latest developments.

Judge’s Ruling Sparks Controversy

The SEC is seeking to appeal Judge Torres’ ruling on Ripple’s programmatic sale of XRP and other distributions, citing “controlling questions of law on which there is substantial ground for differences of opinion.”

The spotlight falls on two judges: Jed Rakoff and Analisa Torres. Judge Rakoff, who presided over the Terra case, rejects Judge Torres’ reasoning in the Ripple case. The difference? Torres’ distinction between Ripple’s sales to institutional and retail investors.

A Tale of Two Judgments

Judge Torres ruled that Ripple’s XRP sales to institutional investors constituted securities, while programmatic sales and other distributions did not. She argued that institutional investors expected gains directly from Ripple, while retail buyers had different expectations.

Judge Rakoff, however, turned the tables, denying Terra and its founder Do Kwon’s motion to dismiss the SEC’s case against them using Judge Torres’ ruling as a precedent. He firmly stated that the Howey test, a critical security test in the US, does not differentiate between buyers.

SEC Plays the Terra Card

Here’s where the plot thickens: The SEC is using Judge Rakoff’s rejection as ammunition to request an interlocutory appeal in the Ripple case. The development was brought to light by Sherrie, an influential XRP figure.

Potential Appeal of Final Ruling: A Legal Tug of War

Opinions are split on whether Judge Torres will grant the SEC’s request. Top legal expert Scott Chamberlain predicts a denial.

However, the SEC has prepared for this outcome, hinting at appealing the final judgment if the interlocutory appeal is denied. The SEC argues that an interlocutory review would save time and money, avoiding two separate lawsuits over the same legal issues.