Crypto Lawyer Says SEC Potential Appeal Will Have Little Impact on XRP

Prominent pro-XRP advocate John E. Deaton has played down the potential implications of an appeal to the United States Securities and Exchange Commission (SEC) in its ongoing case against Ripple over the sale of XRP tokens as an unregistered security.

SEC Considering Possible Appeal Against Ripple Ruling

On July 13, US Judge Annalisa Torres of the US District Court for the Southern District of New York Government The programmatic sale of XRP did not violate US securities law because the SEC could not prove that retail investors expected to profit from this investment based on the “entrepreneurial or managerial efforts of others.”

The decision was based on the Howe test, which states that a contract, transaction or scheme is an “investment contract” and is, therefore, a security if it is (1) an investment of money, (2) in a common enterprise, (3) with the expectation of profit, (4) to be derived from the effort of others.

For the first time since the ruling, the SEC hinted On July 21, he can appeal against this decision in one of his petitions. another ongoing case against Terraform Labs and its co-founder, Du Kwon.

attorneys for these defendants previously said filed Based on the recent Ripple decision proposing to dismiss the charges against its customers. However, the SEC responded by saying that the ruling in favor of Ripple was “wrongly decided” and that the commission may soon find ways to review the decision.

The filing reads:

Contrary to Defendants’ claims, the majority of Ripple’s ruling supports the SEC’s claims in this case and rejects the arguments raised by Defendants here. However, with respect to programmatic and other sales, the SEC respectfully contests that Ripple conflicts with Howe and his offspring and adds baseless requirements. Respectfully, the wrong decision was made on those parts of Ripple, and this Court should not follow them. SEC staff is considering various available avenues for further review and would like to recommend that the SEC seeks such review.

Potential appeal to SEC will likely be insignificant – John Deaton

In response to whether the SEC appeal against Ripple would be a blow to XRP, popular crypto advocate and XRP supporter Deaton provided a positive outlook, implying that this was far from being the case.

According to a tweet on July 22, Deaton supported the claim, saying that it would take two years for the SEC to decide on the appeal first from the Second Circuit. In the US legal system, the courts for the second circuit represent one of the 13 US appeals courts.

Furthermore, counsel said that assuming the Second Circuit determined that the application of the third Howe factor was incorrect, US Judge Torres would still apply the first two Howe factors and reach the same decision.

dayton it has also been said Torres’ decision was apparently not final within the Southern District Court of New York, and another conclusion by another district judge is likely.

However, he expressed that this was unlikely, especially when Judge Torres made the decision citing that Verdict in the popular SEC vs Telegram case In which the Commission won an injunction to stop Telegram from distributing GRAMS tokens on the allegation of being an unregistered security.

At the time of writing, XRP is trading at $0.7404, having gained 3.58% over the last day based on data from TradingView.

XRP trading at $0.7404 on the daily chart | Source: XRPUSD Chart On Tradingview.com

Featured image from Leadership News, chart from TradingView.