A lawyer has provided insights into the potential outcomes if the U.S. Securities and Exchange Commission (SEC) decides to appeal the Ripple ruling regarding XRP. Despite the securities regulator’s indication to appeal the ruling, the lawyer emphasized that “There isn’t an immediate right to an appeal.” He pointed out that if the case is appealed, it will take two years before a decision is issued by an appellate court.
Lawyer Discusses SEC Appeal of Ripple Ruling
Following the recent ruling in the U.S. Securities and Exchange Commission (SEC) v. Ripple case concerning XRP, speculations arise that the securities regulator might appeal the decision made by District Judge Analisa Torres.
John E. Deaton, a well-known lawyer in the XRP community, has provided his analysis and insights regarding the potential outcomes of the SEC’s appeal. An “appeal is not even close to be a setback” for XRP, he tweeted on Saturday, elaborating:
It will be two years from now before a decision is issued by the 2nd Circuit, if it’s appealed. The Torres Decision is the law until then.
“Even if the 2nd Circuit said Torres was wrong regarding her application of the 3rd Howey factor (which I predict they won’t), that doesn’t meant the SEC wins on programmatic sales (sales on exchanges),” Deaton emphasized.
“All that happens is that Torres then applies the other two factors and could likely still rule the same exact way, concluding the SEC didn’t satisfy the common enterprise factor – which is a more difficult factor to meet IMO than the third factor,” he stressed.
In a follow-up tweet, the lawyer clarified: “I’m not suggesting that Judge Torres decision is binding within the SDNY [Southern District of New York]. A fellow district judge could disagree with her. But I think a fellow judge in the 2nd Circuit is going to be hard pressed to disagree with Judge Torres, especially considering she cited Judge Castel from Telegram.”
Deaton previously explained: “There isn’t an immediate right to an appeal. Either side can ask Judge Torres to allow it and then ask the 2nd Circuit to accept.” He added:
I don’t see Judge Torres approving it because the SEC sought summary judgment pursuant to Howey and the judge did a strict application of the Howey factors to each type of XRP sale alleged by the SEC to satisfy Howey.
“The court agreed that the Howey test was controlling and applied it accordingly,” he continued. “In essence, the judge applied a non-controversial 76-year-old well-settled supreme court test to the facts of the case. It’s a straightforward application of that well-settled test, despite any challenges related to her reasoning or any policy considerations.”
The SEC has indicated that it is considering filing an appeal in response to the Ripple ruling. SEC Chairman Gary Gensler said last week that the securities regulator is “disappointed” in the ruling regarding retail investors. The agency recently asked Congress for more funding to address crypto market risks. “We’ve seen the Wild West of the crypto markets, rife with noncompliance, where investors have put hard-earned assets at risk in a highly speculative asset class,” Gensler told lawmakers.
What do you think about the analysis of the Ripple case by lawyer John E. Deaton? Let us know in the comments section below.
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