In response to the claim that an appeal from the U.S. Securities and Exchange Commission in the Ripple Labs case could be a setback for XRP, crypto lawyer John E. Deaton stated that “an appeal is not even close to a setback.”
Elaborating, the Crypto Law founder explained his belief that “it will be two years from now before a decision is issued by the 2nd Circuit, if it’s appealed,” adding: “The Torres Decision is the law until then — at least in the 2nd Circuit.”
If or when an appeal comes in the Ripple case, it would go to the Second Circuit Court of Appeals.
Deaton: Torres ‘could likely still rule the same exact way’
Deaton’s take comes after SEC lawyers used a separate ongoing enforcement case — against Terraform Labs and its former CEO, Do Kwon — to preview its expected appeal of last week’s split decision in the agency’s case against Ripple Labs.
“Respectfully, those portions of Ripple were wrongly decided, and this Court should not follow them,” SEC lawyers argued in a Friday filing to Judge Jed Rakoff of the U.S. District Court for the Southern District of New York.
The portion of the Ripple decision likely to be appealed is that which determined that “blind bid” or “programmatic” sales of XRP to third parties did not fit all the criteria of a securities offering.
To this point, Deaton tweeted that “even if the 2nd Circuit said Torres was wrong regarding her application of the 3rd Howey factor […] that doesn’t mean the SEC wins on Programmatic sales (sales on exchanges).”
“All that happens is that Torres then applies the other two factors and could likely still rule the same exact way, concluding the SEC didn’t satisfy the common enterprise factor,” he said, before opining: “Don’t let anyone underestimate how significant this win is for XRP, XRP holders and Ripple.”
