U.S. District Judge Analisa Torres has given the green light for the U.S. Securities and Exchange Commission (SEC) to pursue an interlocutory appeal in its ongoing case against Ripple Labs.
The development comes as the SEC seeks to challenge the courts ruling that Ripple did not violate securities laws when making XRP available to retail traders via exchanges.
The decision by Judge Torres, who presides over the U.S. District Court for the Southern District of New York, allows the SEC to file an appeal, which must be submitted by August 18.
Ripple Labs, along with its CEO Brad Garlinghouse and co-founder Christian Larsen, had opposed the SECs appeal request, contending that no new legal matters were at play.
The case, a pivotal testing ground for the SEC‘s regulatory purview over cryptocurrencies, could potentially reshape how the agency oversees the digital asset market. The dispute revolves around whether Ripple’s XRP sales required registration with the SEC, as the agency argued in a lawsuit initiated in 2020.
In her initial judgment, Judge Torres deemed that only Ripples sales of XRP to institutional investors were subject to securities laws, a finding that excluded the approximately $757 million in XRP sales to retail investors on crypto exchanges from the category of securities transactions.
Should Judge Torres permit the SECs appeal to proceed to the U.S. Court of Appeals for the Second Circuit, a conclusive decision might be deferred for a year or longer.