In a new twist in the SEC vs Ripple case, the SEC appears to be considering an appeal against the landmark ruling that declared Ripple’s XRP token not a security. The recent indication was found in an SEC filing in a different case, SEC vs Terraform Labs/Do Kwon, as revealed by former federal prosecutor and defence lawyer, James K. Filan.
Renowned defence attorney James K. Filan, a former federal prosecutor, spotlighted the SEC’s latest move in a tweet. The commission discussed Judge Torres’s decision in the Ripple case in its filing, and indicated that the “SEC staff is considering the various available avenues for further review and intends to recommend that the SEC seek such review.”
Legal Experts Predict SEC’s Appeal Would Fail
John Deaton, Lawyer and founder of CryptoLawUS, shared his insights on this development. Echoing his past predictions, Deaton stands by his view that the SEC’s potential appeal on secondary market sales will fall through. He commends Judge Torres for solely applying the Howey test in the judgement, adding, “If she had [considered other factors], then she would have erred.”
The SEC’s Common Enterprise Theory Questioned
Deaton believes that even if the SEC manages a successful appeal, Judge Torres is likely to conclude that the SEC couldn’t prove a common enterprise between Ripple and XRP holders in the secondary market. He further highlights that the SEC flip-flopped on its common enterprise theory thrice during the case, ending up arguing that XRP itself represented the common enterprise, a theory he describes as circular and conclusory.
In a final jab at the SEC, Deaton stated that the commission’s lawyers sound like “Prima Donna crybabies” until they can point to a Supreme Court case adding a factor to the Howey test requiring judges to consider the sophistication level of investors or ensure the result is consistent with the 1934 Securities Act’s policy considerations.
With the potential for the SEC to appeal the Ripple case, the legal drama continues, keeping the cryptocurrency community on edge.
Source: https://coinpedia.org/news/the-ripple-sec-saga-continues-experts-anticipate-secs-appeal-will-crash-and-burn/