SEC Considers Appeal in SEC vs Ripple Case
In a new development in the SEC vs Ripple case, the SEC is reportedly considering an appeal against the ruling that declared Ripple’s XRP token not a security. James K. Filan, a former federal prosecutor, revealed this information in a tweet, highlighting the SEC’s discussion of Judge Torres’s decision in its filing. The SEC indicated that it is exploring options for further review and intends to recommend seeking such review.
Key Points:
- The SEC is considering an appeal against the ruling that declared XRP not a security.
- Legal expert John Deaton believes the SEC’s potential appeal on secondary market sales will fail.
- Deaton argues that the SEC failed to prove a common enterprise between Ripple and XRP holders in the secondary market.
- He criticizes the SEC for flip-flopping on its common enterprise theory during the case.
- The potential appeal keeps the cryptocurrency community on edge.
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Legal Experts Predict SEC’s Appeal Would Fail
According to lawyer and founder of CryptoLawUS, John Deaton, the SEC’s potential appeal on secondary market sales is likely to fail. He praises Judge Torres for applying the Howey test correctly in the ruling and believes that even if the SEC succeeds in the appeal, the court is unlikely to find a common enterprise between Ripple and XRP holders in the secondary market.
The SEC’s Common Enterprise Theory Questioned
Deaton criticizes the SEC for changing its common enterprise theory multiple times during the case and ultimately arguing that XRP itself represented the common enterprise. He describes this theory as circular and conclusory. Deaton concludes by challenging the SEC to find a Supreme Court case that adds a factor to the Howey test requiring consideration of investor sophistication or aligning with the Securities Act’s policy considerations.
Hot Take:
The potential for the SEC to appeal the Ripple case keeps the cryptocurrency community on edge. However, legal experts predict that the appeal would fail, highlighting the SEC’s weak arguments regarding a common enterprise between Ripple and XRP holders in the secondary market.
