John E. Deaton, a well-known lawyer who supports XRP, has expressed his belief that the appeal made by the United States Securities and Exchange Commission (SEC) in their ongoing case against Ripple regarding the sale of XRP as an unregistered security will not have a significant impact.
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SEC Appeal Unlikely to Impact XRP, Says Crypto Lawyer. SEC Nudges At Possible Appeal Against Ripple Ruling
On July 13, Judge Analisa Torres of the US District Court for the Southern District of New York ruled that the sale of XRP did not violate US securities law. The ruling was based on the Howey Test, which states that a contract, transaction, or scheme is an “investment contract” and, therefore, a security if it is an investment of money in a common enterprise with the expectation of profit to be gained from the effort of others. The SEC hinted on July 21 that they might appeal this judgment in one of its petitions in another ongoing case against Terraform Labs and its co-founder, Do Kwon. The defendants' lawyers had earlier filed a motion to dismiss the charges against their clients based on the recent Ripple ruling. However, the SEC responded by saying that the ruling which favored Ripple was “wrongly decided,” and the commission could soon explore ways to review this judgment. SEC Appeal Unlikely to Impact XRP, Says Crypto Lawyer.
The filing read: Contrary to Defendants’ assertions, much of the Ripple ruling supports the SEC’s claims in this case and rejects arguments Defendants have raised here. However, with respect to the Programmatic and other sales, the SEC respectfully avers that Ripple conflicts with and adds baseless requirements to Howey and its progeny. Respectfully, those portions of Ripple were wrongly decided, and this Court should not follow them. SEC staff is considering the various available avenues for further review and intends to recommend that the SEC seek such review.
SEC’s Potential Appeal To Be Likely Insignificant – John Deaton
According to popular crypto lawyer and XRP supporter Deaton, an appeal by the SEC in its case against Ripple would not necessarily represent a setback for XRP. Deaton explained that an appeal by the SEC would take two years to get a decision from the second circuit, which represents one of the 13 U.S. Courts of Appeal. Even if the second circuit determined that application of the third Howey factor was wrong, U.S. Judge Torres would still apply the first two Howey factors and arrive at the same decision. Deaton also mentioned the possibility of another district judge having a different conclusion, but deemed it unlikely given Judge Torres' citation of the ruling in the SEC v. Telegram case. As of writing, XRP is trading at $0.7404, with a 3.58% gain in the last day according to Tradingview data.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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