- After XRP was ruled as not a security, the XRP community wonders what’s next.
- Despite the verdict, it seems there is still much more left to the Ripple lawsuit.
- Attorney Deaton makes it clear that what happens next will not change the verdict.
John Deaton, the attorney representing more than 75,000 holders in the Ripple-SEC lawsuit, shares his insight on the latest development. According to the potential outcome of the Second Circuit possibly overturning Ripple and XRP’s recent victory, he says fear not.
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Specifically, Deaton believes Judge Analisa Torres would arrive at the same result by considering other factors in the Howey Test. The Howey Test is a critical USA legal assessment used to determine if a transaction qualifies as a security.
In particular, Attorney Deaton points out that the Supreme Court emphasizes focusing on the satisfaction of the Howey Test. In fact, he says it is crucial when determining whether a transaction constitutes an investment contract.
Furthermore, according to Deaton, the application of the Howey factors is crucial in determining an investment contract. In this case, Judge Torres said Ripple’s sales of XRP to institutional investors met all requirements of the Howey Test. However, programmatic sales on exchanges did not.
Deaton further highlights that the Securities and Exchange Commission (SEC) claims that Howey provides relevant information to industry participants in determining whether a token is a security. In the Ripple case, the judge applied the test to the undisputed facts, without considering the level of sophistication of the buyers.
Deaton explains that if the SEC successfully challenges her decision in the Second Circuit, the case would go back to her for further action. Despite criticisms of Judge Torres’ ruling as well as thoughts of an appeal overturn, Deaton shows no concern.
In such a scenario, Deaton believes that Judge Torres would see the common enterprise factor being unsatisfactory between XRP holders and Ripple Labs. Additionally, she could present the issue of consumptive intent to a jury, considering the first two factors of the Howey Test.
Finally, Deaton commends Judge Torres for her handling of the case and asserts that the SEC ultimately lost. Amid the ongoing legal battle, it is obvious that the crypto community will keep a close watch for a positive outcome.
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