The Securities and Exchange Commission is appealing a judge’s decision in its case against Ripple Labs. 

The SEC filed a motion for leave to file an interlocutory appeal on Wednesday afternoon in the Southern District of New York. 

“Interlocutory review is warranted here. These two issues involve controlling questions of law on which there is substantial ground for differences of opinion, as reflected by an intra-district split that has already developed,” the agency said in a letter to Judge Analisa Torres. 

The agency cited a recent case against Terraform Labs, where a judge rejected Torres’ approach. An SEC official declined to comment whether that influenced its appeal. 

Torres ruled last month that some of Ripple’s sales, called programmatic sales, of XRP did not violate securities laws because of a blind bid process in place for them, so buyers did not know the sales benefited Ripple. She also ruled that other direct sales of the token to institutional investors were securities. 

The SEC is looking to specifically appeal programmatic sales as well as “other distributions,” an SEC official said in a media briefing. Other distributions were offers and sales of XRP in exchange for goods and services, according to the agency's motion. 

The SEC also said in its motion that an interlocutory review would "advance the termination of this litigation in an efficient manner by removing the possibility of two remedies phases and two trials."

Going forward

The SEC needs approval from the United States District Court Southern District of New York to appeal and then also needs approval from the court of appeals. If both of those things happen, then the Second Circuit would need permission and then could accept the case for interlocutory appeal. 

The SEC and Ripple have been embroiled in a legal fight since 2020, when the agency accused Ripple of raising $1.3 billion in 2020 through the sale of XRP, which it says is an unregistered security, while also charging Garlinghouse and Larsen. 

Ripple too could appeal Torres' ruling.

Gary DeWaal, senior counsel at the law firm Katten, said in an email that he expected the SEC to appeal adding that “it would not be surprising if Ripple makes a similar request in connection with the Court’s decision regarding the Institutional Sales.”