The U.S. Securities and Exchange Commission (SEC) has recently submitted its opening brief in the appeal against Ripple. The brief was shared with the XRP community on X by James K. Filan, a well-respected attorney in the crypto space, and it has garnered significant attention.
Jeremy Hogan, another prominent attorney and XRP supporter, provided an insightful analysis of the filing. According to Hogan, the appeal focuses solely on the district court’s decision that XRP sales to retail investors did not constitute securities transactions.
Hogan also stated that the SEC did not argue about harm to investors, noting that proving investors were harmed will be difficult now that XRP has surpassed $3.
This SEC brief was hard to work thru because, IMO, the case won't be ruled on. But I've come this far so, dangit, here we go! My thoughts on the initial Ripple v. SEC appeal brief…
We aren't holding back tonight. 🙂 https://t.co/l8Tcqdfuxc pic.twitter.com/bIWnJC1y3N
— Jeremy Hogan (@attorneyjeremy1) January 16, 2025
The SEC’s Opening Brief
According to Hogan, the SEC’s primary argument is that it does not need to prove that XRP purchasers were aware of Ripple’s statements about efforts to increase XRP’s value. Instead, the SEC relies on precedent to argue that it is sufficient to show the existence of such promotional statements.
Hogan criticized this approach, stating, “The problem the SEC has is that, from my reading of the first two cases, they say no such thing.” He also noted that distinguishing between the concepts of “reliance” and “knowledge” is pivotal, with the trial court emphasizing the latter in its ruling.
The SEC’s reliance on prior cases, particularly Aqua-Sonic, appears tenuous. Hogan observed that the SEC had to combine sentences from multiple sections of the Aqua-Sonic decision to construct its argument.
He also expects Ripple to counter this by highlighting key differences between both cases, such as the lack of evidence that XRP retail investors were aware of Ripple’s promises.
Another significant point of contention is the SEC’s failure to challenge the substantial evidence submitted by attorney John Deaton on behalf of XRP holders. Deaton had gathered thousands of affidavits from XRP investors refuting claims of reliance on Ripple’s statements.
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Hogan expressed surprise that the SEC did not attempt to counter this evidence during the initial proceedings, noting that this oversight could prove detrimental to its appeal.
Implications of the SEC’s Appeal
Hogan highlighted the broader impact of the SEC’s appeal, noting that if the appellate court upholds the district court’s decision, the SEC could face a new precedent requiring proof of investor awareness of promotional statements.
This could complicate enforcement, leading to longer, more expensive litigation. Ripple might also revive its argument that investment contracts require contractual obligations, further weakening the SEC’s position.
Hogan concluded by questioning the SEC’s rationale for pursuing the appeal, highlighting the risks of adverse legal precedents. Ripple, meanwhile, could use the appeal to strengthen its position and challenge the SEC’s approach.
Disclaimer: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are urged to do in-depth research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses.
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