According to renowned crypto lawyer John Deaton, an appeal of the recent Ripple court decision by the U.S. Securities and Exchange Commission (SEC) would not adversely affect XRP holders.
Potential SEC Appeal Not A Blow To XRP Proponents
The decision that Ripple’s XRP sales to investors did not violate securities laws has given hope to the rest of the crypto industry. It has also given hope to the slew of other crypto firms facing SEC charges for allegedly selling securities.
The SEC suggested in court documents on Friday that it could soon pursue an appeal of the judgment, prompting speculation that such a move would be a significant blow to holders of the XRP token.
However, attorney John E Deaton, representing over 75,000 XRP holders, pushed back against the claim in a recent Tweet. “An appeal is not even close to a setback,” Deaton opined.
The CryptoLaw founder explained that it would take a significant amount of time for the appeal to work its way through the court system, adding that Judge Analisa Torres’ decision would remain in effect for at least two years until the 2nd Circuit Court of Appeals issued its own ruling.
Deaton further elaborated on the impact of a potential appeal outcome. He is confident that Judge Torres’ decision, particularly regarding other Howey Test legal factors such as the “common enterprise” and “investment of money”, would be upheld. In other words, Deaton believes the chances of the Second Circuit overturning this part of the verdict are rather slim.
SEC Created A “Mess”
Ripple chief Brad Garlinghouse, who described the Torres ruling as “an unequivocal win for Ripple and for crypto in the U.S.,” separately lambasted the SEC’s endeavours to be the primary regulator of crypto assets.
“The SEC created this mess by proclaiming it was the cop on the crypto beat when it had no legal jurisdiction,” he tweeted. “We all know legislation—not more regulation by enforcement — is the only way forward to provide clear rules and protect retail.
Ripple’s Chief Legal Officer Stuart Alderoty followed up, stating that: “A securities agency only has jurisdiction over securities — no security, no role for the SEC.” He added that the SEC claiming jurisdiction over crypto is “simply a political power play” that “hurts everyone.”
If or when an appeal comes in, the Ripple case is anyone’s guess. That being said, Deaton is saying not to allow doomsayers “underestimate how significant this win is for XRP and XRP Holders and Ripple.”