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Top lawyer says the SEC’s potential appeal is a complete waste of taxpayer money.
Key Notes
SEC expected to appeal court decision favoring Ripple in the XRP classification case.Top lawyer says SEC's appeal is unlikely to succeed, based on the specific facts of the case.Critic says SEC should focus on its mission rather than pursuing a likely losing appeal.The US Securities and Exchange Commission (SEC) could appeal the court decision in the Ripple case, according to a former SEC lawyer cited by Fox Business reporter Eleanor Terrett.
In a post published by Eleanor Terrett on X, a lawyer who had recently left the commission informed her that the agency would likely appeal Judge Torres’s ruling from July 2023.
Judge Torres ruled in July 2023 that the secondary sales of XRP XRP $0.59 24h volatility: -0.3% Market cap: $33.19 B Vol. 24h: $1.36 B should not be classified as securities. This decision provided Ripple with a sense of relief after years of battling the SEC and its regulations. According to the former lawyer, whose identity was not revealed, the SEC is not happy with the ruling. They believe it was a wrong call and might appeal against it.
🚨NEW: A former @SECGov lawyer who recently left the agency tells me the SEC will ‘probably’ appeal Judge Torres’s July 2023 ruling concerning the $XRP programmatic sales in the @Ripple case partly because: “everyone over there [at the SEC] truly believes that the decision is…
— Eleanor Terrett (@EleanorTerrett) September 26, 2024
Experts Believe SEC’s Appeal Unlikely to Succeed
However, the top attorney and Republican candidate for the United States Senate in Massachusetts, John Deaton, commented on the case, stating that SEC appealing would be a waste of taxpayer money as they would lose again if they chose to appeal. Deaton, who has actively participated in the SEC vs. Ripple lawsuits and litigated for over two and a half years, believes that the appellate court will uphold Judge Torres’s ruling on the test’s third prong.
He noted that the Judge made her decision based on fact. While the SEC decided not to rely on expert testimony relating to XRP holders, the Judge instead used the written statement by XRP holder submitted by Deaton. He said:
“I don’t believe an appellate court will rule Judge Torres was in error in applying the 3rd prong. Judge Torres made her ruling very fact specific. The SEC did not rely on any expert testimony related to XRP holders (it was excluded anyway) but the Judge did rely, however, on the XRP Holder affidavits I submitted.”
He further noted that there may be scenarios where secondary sales could be seen as investment contracts, that is, if all Howey factors are met. However, the specific facts are not met in Ripple’s case. Thus, if the case is appealed, the appellate court will likely affirm Judge Torres’s ruling.
Potential Impact on XRP and Broader Crypto Industry
More so, top lawyer Jeremy Hogan commented about the case, saying that the SEC believes the ruling is not right because it is on the losing side. Instead of focusing on appealing the decision, the SEC should consider whether such an appeal is in tandem with its mission to protect investors and promote capital formation.
Should the SEC decide to appeal the case, it could affect the XRP coin and the general crypto industry. It could increase the call for more regulatory clarity regarding the status of cryptocurrencies. The SEC still has until October 7th to file an appeal.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
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Temitope is a writer with more than four years of experience writing across various niches. He has a special interest in the fintech and blockchain spaces and enjoy writing articles in those areas. He holds bachelor's and master's degrees in linguistics. When not writing, he trades forex and plays video games.
