Ripple: Crypto lawyer rules out near-term impacts from SEC appeal
- The attorney said that the ruling will be legally binding for at least two years.
- The application of the third requirement of the Howey test has been debated.
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But the battle seems far from over. The SEC publicly expressed its displeasure regarding some portions of the ruling and signaled intent to have them reviewed, according to a recent Bloomberg report.
Continuing with the war of narratives, Pro-Ripple lawyer John E Deaton ruled out any threat to XRP in the near-term even if the watchdog goes ahead with the appeal.
XRP advocate rules out review threat
Deaton took to Twitter to state that even if the appeal is made now, it will take at least two years for a second-level court to make a decision. Until then, District Court Judge Analisa Torres’ decision will be legally binding on all stakeholders.
The attorney went on to highlight another intriguing scenario. He claimed that even if the judge in a higher court points out flaws in Torres’ application of the third criterion of Howey Test, it still won’t guarantee a win for the SEC.
In such an event, Judge Torres could apply the other two criterion to the case which, in Deaton’s view, will be more difficult to satisfy.
Bone of contention
The Howey test is a legal test used to determine if a transaction could be considered a security. According to the test, a transaction is a security if it is – An investment of money, in a common enterprise, with the expectation of profit, to be derived from the efforts of others.
The recent judgement ruled that sale of XRP to general public was not to be considered as a security as retail buyers could not have known about Ripple’s intentions, thus failing to meet the third factor of the Howey Test.
How many are 1,10,100 XRPs worth today
However, this part of the ruling has become a subject of debate. Former SEC official John Reed Stark disputed the assumption, calling it “not only patronizing but just plain insulting”
Since the ruling, XRP’s fortunes have swelled. The token was the fourth-largest crypto by market cap at the time of writing, having pumped 55% since the judgement was made public, data from CoinMarketCap revealed.