In recent developments surrounding the XRP lawsuit, the possibility of the US Securities and Exchange Commission (SEC) filing an appeal against Judge Analisa Torres’ Summary Judgment seems increasingly likely.
As the crypto market speculates on the potential outcomes, it is crucial to explore the potential scenarios Ripple could face if the US SEC manages to secure a favorable appeal. Amidst these legal proceedings, the XRP price has experienced a period of stability following a correction post the Summary Judgment-led rally.
Read Also: What Would SEC Do Next In Ripple and XRP Case? Is Settlement Coming? Legal Expert Explained
During a recent discussion on the Ripple lawsuit, Gary Gensler, Chair of the US SEC, evaded direct questions on the ruling, emphasizing that all decisions are made collectively by the agency’s commissioners.
Notably, he reiterated his warnings to “investors” about the risks associated with the crypto market. American businessman Mark Cuban objected to Gensler’s use of the term “investors,” claiming that token holders should not be labeled as such. Cuban argued,
“[Gary Gensler] is in the habit of exclusively calling token holders investors. He knows that is incorrect, but it serves his purpose.”
John Deaton, the attorney representing token holders in the lawsuit, provided his perspective on Gensler’s comments and the potential appeal by the SEC.
Deaton expressed confidence that Judge Torres would have a cushion based on the first two factors of the Howey test, implying that the programmatic sale of XRP tokens to retail traders does not constitute a securities transaction.
Deaton shared his opinion on the potential ramifications of an appeal, stating,
“If the SEC were to win on appeal regarding the 3rd factor, the case would be remanded back to Judge Torres to apply the other two factors. In all likelihood, she would find that those factors are lacking, leading to the same practical result we have today.”
Read Also: Attorney Jeremy Hogan Reveals SEC’s Only Ammunition against Ripple in XRP Lawsuit
To assess whether transactions qualify as investment contracts, the Howey test is commonly employed. It hinges on two primary factors: whether an individual invests money in a common enterprise and whether they expect profits solely from the efforts of the promoter or a third party. If these conditions are met, the transaction is deemed an investment contract.
In conclusion, as the US SEC contemplates filing an appeal against Judge Analisa Torres’ Summary Judgment, various potential outcomes lie ahead. Ripple and XRP token holders eagerly await the final resolution, closely monitoring developments that may impact the future of XRP within the regulatory framework in the United States.
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