The U.S. Securities and Exchange Commission (SEC) has taken another step in the ongoing legal battle against Ripple Labs.
Last Friday, the SEC filed a request with the Southern District of New York, urging the court to reconsider its previous ruling on the agency’s lawsuit against Ripple.
The SEC’s filing emphasizes the intricate legal issues surrounding the case, referring to them as “knotty legal problems.”
This move comes after a summary judgment in July by Judge Analisa Torres, which determined that Ripple’s sales of its digital asset, XRP, to institutional investors violated securities laws.
However, sales of XRP on public exchanges to retail investors were deemed acceptable under securities regulations.
Amidst this legal battle, Ripple Labs made an announcement last Friday regarding its acquisition of Fortress Trust, a crypto infrastructure startup based in Nevada.
While the terms of the deal remain undisclosed, it’s a significant move as it grants Ripple a regulatory license in the state of Nevada.
In its recent filing, the SEC stressed the importance of obtaining legal clarification in this matter. The agency pointed out that conflicting opinions exist in U.S. courts regarding whether similar offerings meet the criteria of the Howey test.
The Howey test is a crucial legal tool used by the SEC to determine if a transaction qualifies as an investment contract, thus categorizing it as a financial security.
On August 18, the SEC had previously filed a motion for an interlocutory appeal against Ripple Labs. In response, Ripple filed an opposition to the SEC’s motion last week, arguing that the regulator’s claims for an appeal lack legal sufficiency.
The legal battle between the SEC and Ripple Labs began in December 2020, when the SEC initiated legal action against Ripple, alleging that the company had offered XRP as an unregistered security.
Since then, the case has garnered significant attention within the cryptocurrency industry and the broader financial markets.
