John Deaton, the attorney representing over 75,000 XRP holders in the Ripple-SEC lawsuit, has responded to the recent denial of the SEC’s interlocutory appeal request. The decision handed down by Judge Analisa Torres solidifies XRP’s unique legal position as the only altcoin with clear non-security status in the United States.
Attorney Deaton highlighted the importance of this ruling in an interview, stating, “As far as legal status, XRP is the only one that has the pure legal status of not being a security.”
XRP’s Non-Security Status
XRP recorded a major victory on July 13 when the court declared XRP a non-security asset. The court further differentiated Ripple’s XRP sales, categorizing those to institutional investors as investment contracts, while sales to retail investors as non-investment contracts.
However, the SEC, determined to revisit this decision, tried to secure approval for an interlocutory appeal, citing the existence of legal questions stemming from the July 13 judgment.
Ripple, unsurprisingly, opposed the SEC’s appeal request. Following the submission of motions from both parties, the court delivered the long-awaited ruling. The court rejected the SEC’s appeal, affirming that the July 13 decision did not present purely legal questions as asserted by the SEC.
This ruling confirms XRP’s position as the only digital asset, aside from Bitcoin, to possess unquestionable legal clarity within the U.S. This sentiment was shared a few weeks ago by Ripple’s Chief Technology Officer (CTO) David Schwartz.
Why the SEC’s Appeal was Denied
Deaton offered his insight into why the court denied the SEC’s interlocutory appeal request. He explained that such appeals are typically granted when the appellate court has not had the opportunity to analyze the case’s factual details.
However, Deaton pointed out that Judge Torres had thoroughly considered the facts before issuing her initial decision. He further emphasized that the judge’s decision fortified her original ruling. Notably, Deaton predicted earlier that the SEC’s appeal would be rejected.
The SEC has limited options with the denial of the SEC’s interlocutory appeal. If they are to persist in appealing the court’s decision regarding Ripple’s programmatic XRP sales and other distributions, they must await the resolution of all pending issues.
The court has already scheduled a trial for April 23, 2024, to address the SEC’s case against Ripple executives, although the trial’s duration remains uncertain. Alternatively, the SEC can explore the possibility of a settlement during an upcoming conference mandated by the court.
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