- John Deaton praises federal judge’s rejection of SEC’s appeal request in Ripple lawsuit.
- Judge Analisa Torres denies SEC’s interlocutory appeal request.
- Deaton predicted the denial of the appeal earlier.
In a new video analysis on the crypto laws news platform, ‘Crypto Law’, on X (formerly Twitter), high-profile attorney John Deaton hailed a federal judge’s rejection of the SEC’s appeal request in its ongoing lawsuit against Ripple as a “masterful” decision ensuring trial success.
The Torres Smackdown https://t.co/rCuddPisx5— CryptoLaw (@CryptoLawUS) October 4, 2023
In the ongoing legal battle between the SEC and Ripple Labs, a new development has emerged that favors the San Francisco startup. On Wednesday, Judge Analisa Torres denied the SEC’s request to file an interlocutory appeal of her previous ruling that dismissed the regulator’s claim that Ripple’s sales of XRP constitute an unregistered securities offering.
Deaton said the ruling came as no surprise, noting that he had predicted the judge would deny the SEC’s request for an interlocutory appeal. He pointed out that back in April, he had tweeted that Torres would likely grant the motion to appeal but then deny the actual appeal and explain why the regulator’s arguments were unfounded.
According to Deaton, an interlocutory appeal is only permitted on a “pure question of law” that can be decided quickly without a detailed review of the case record. He said Judge Torres reportedly stated that the core issues in the SEC vs. Ripple case cannot be resolved without examining the extensive factual record, expert reports, and evidence submitted by both parties.
Deaton said Torres also rejected the SEC‘s argument that there were substantial grounds for a difference of opinion on the XRP sales issue, writing that the regulator failed to cite any case law that contradicted her application of the Howey test.
The lawyer added that the decision means that the SEC cannot immediately appeal Torres’ summary judgment at the appellate court level. The case will now proceed to trial next April on the remaining charges against Ripple executives Brad Garlinghouse and Chris Larsen.
While Ripple and the broader crypto industry welcomed the latest ruling, Torres maintained that she did not categorically exclude the possibility that a cryptocurrency sold on exchanges could be deemed a security under certain circumstances. Her judgment was narrowly focused on the specifics of the XRP case.
According to Deaton, the denial of an early appeal reduces the chances of the case reaching the Supreme Court but establishes Torres’ prior ruling on XRP as settled law, at least for now. With the trial set for April, Deaton believes the SEC will need to decide whether to settle or take its chances convincing a jury that Ripple violated securities laws.
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