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- XRP-friendly lawyer has thrown more light on the SEC appeal move in the Ripple vs SEC suit.
- Industry experts believe the regulator is still chasing an already-won battle
Pro-XRP lawyer John E. Deaton has publicly predicted the outcome of the United States Securities and Exchange Commission (SEC) interlocutory appeal of Judge Analisa Torres‘ ruling that Ripple’s XRP is not security when traded on a secondary marketplace.
Speaking at the onXDC Live blockchain industry conference which was held in Texas, Deaton stated that the court will reject the motion put forward by the regulator. If this eventually happens, the SEC will be mandated to wait till the end of next year before filing a full appeal in the Second Circuit.
Attempting to clarify certain misconceptions surrounding the Ripple vs. SEC case including claims that the SEC had already appealed her decision on Ripple’s programmatic sales and other distributions, Deaton affirmed that there is currently no appeal as the federal judge only permitted the U.S. regulator to request an appeal for an interlocutory appeal.
He believes that Judge Torres only approved the request to establish that the ruling is perfect and based on evidence
SEC Sees Dissent in XRP Ruling
After Judge Torres’s July 13th ruling on XRP, the SEC announced its intention to appeal the verdict which posits that the programmatic offers and XRP sales by Ripple and its executives Brad Garlinghouse and Chris Larsen on trading platforms do not violate securities laws as it does not influence investors to expect profits from the efforts of others. In the regulator’s opinion, Judge Torres’ decision needs to be re-examined by an appellate court.
Another argument that the SEC intended to contest is that Ripple’s distribution of the token as payment for services was not sufficient enough to be recognized as an investment of money.
Therefore, the SEC sent a letter to Judge Torres, requesting that she freeze the case during the appeal. The regulator cited concerns over multiple pending court cases against crypto firms, such as Binance and Coinbase, which could be impacted by this appeal’s outcome.
About a week later, Judge Torres granted the SEC’s request to file a motion for an interlocutory appeal, giving the regulator one week to file the motion.
Ripple was then given until September 1 to respond, with the SEC given a reply window until September 8th. Since then, some netizens have speculated that SEC’s argument in the motion was agreed and accepted by the Judge and this is why she approved its motion. However, just like Deaton, some other industry players do not share that sentiment.
Right after the federal judge gave the SEC a go-ahead, Bill Hughes, ConsenSys Senior Counsel, highlighted the challenging position that the regulator had fixed itself.
Firstly, Hughes did not think that Judge Torres would be convinced by the SEC’s inconsistent arguments. Even with the judge granting it leave to file a motion for leave to appeal, the Counsel still pointed out that the SEC would face the uphill task of gaining the Second Circuit’s green light for the appeal.
