Attorney Deaton is confident that the SEC appealing the victory secured by Ripple will not be a setback for the XRP community.
Crypto-Law.US founder John Deaton has urged XRP holders not to allow critics to undermine the significance of Ripple’s victory against the SEC.
“An appeal is not even close to being a setback… Don’t let anyone underestimate how significant this win is for XRP and XRP Holders and Ripple,” said Deaton.
The prominent lawyer echoed this while reacting to speculation that the SEC could appeal the court’s decision on the Ripple case.
SEC Planning to Appeal?
As reported earlier, the SEC hinted at plans to appeal the summary judgment decision in the Ripple case after TerraForm Labs and its founder, Do Kwon, tried to use the ruling to beat the agency’s charges against them.
In the TerraForm Labs’ case, the SEC sought to review the summary judgment because it was “wrongfully decided.”
Notably, the SEC’s remark sparked concern within the crypto community, with some people considering the development a potential setback for XRP.
Deaton Thinks Otherwise
Interestingly, Attorney Deaton does not believe an appeal in the case could be a setback for the XRP community. According to Deaton, it will take at least two years before the Second Circuit will issue a decision if the SEC successfully appeals the case.
Meanwhile, Deaton stressed that Judge Analisa Torres’ decision will remain the law until the Second Circuit issues a verdict.
Furthermore, Deaton said if the Second Circuit decides that Judge Torres’ was wrong regarding her application of the third factor of Howey on Ripple’s programmatic XRP sales on exchanges, it still does not imply that the SEC has won that aspect of the case.
Judge Torres to Issue Similar Verdict
He speculated that the Second Circuit would remand the case. In this scenario, the judge will apply the remaining two factors of Howey and conclude that the SEC did not satisfy the common enterprise factor of the test.
According to Deaton, it is more difficult for the SEC to meet the common enterprise factor of the Howey test than the third factor. It bears mentioning that Judge Torres ruled on Ripple’s programmatic XRP sales on exchanges by relying on the third factor of Howey.
Judge Torres concluded that retail investors were not expecting profits directly from Ripple’s efforts, like institutional clients.
It is worth noting that critics have suggested that the Second Circuit will overturn Judge Torres’ ruling in the Ripple case. However, Attorney Deaton does not think so.
Let me more precise: I’m not suggesting that Judge Torres decision is binding within the SDNY. 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…
— John E Deaton (@JohnEDeaton1) July 22, 2023
Deaton explained that a Second Circuit judge would be hard-pressed before disagreeing with Judge Torres’ ruling.
