After the court declared that the XRP sold in secondary markets is not a security in the case brought against Ripple by the U.S. Securities and Exchange Commission (SEC), Ripple supporters were taken aback when the SEC announced that it would appeal the decision. Experts in the field have started sharing their opinions on what could happen next after SEC’s decision to appeal the court’s ruling.
Prominent Attorney Puts an End to the Debate Following SEC’s Statement
John Deaton, a prominent attorney and a supporter of XRP, stated that the SEC will face significant challenges in proving a crucial part of the Howey Test, particularly the third element, in the appeal process.
Deaton’s opinion is based on the fact that while the court classified Ripple’s sales to institutional investors as securities, it did not classify the sales made to individual investors or the XRP sales of Ripple executives Brad Garlinghouse and Chris Larsen mentioned in the case as securities. If the SEC succeeds in appealing the decision, the attorney expects the judge overseeing the case, Analisa Torres, to uphold her ruling regarding XRP sales in secondary markets.
The regulatory agency faced criticism throughout the trial due to inconsistencies in its theories, causing it to change its initial statement that XRP itself is a security and instead argue for the classification of three different instances involving XRP as securities. While the SEC expressed satisfaction with the court’s decision to classify sales to institutional investors as securities, it claimed that the decision regarding individual investors was incorrect.
SEC’s Statement Casts a Shadow on the Future of XRP
Currently, the SEC faces a challenging and potentially uncertain journey due to the possibility of an appeal. If the federal agency appeals the court’s decision, it could significantly prolong the process leading to the final outcome of the case and introduce uncertainties in the cryptocurrency market. Indeed, SEC’s announcement of the appeal has already cast a shadow on the future of XRP. The price of the altcoin has experienced a slight retreat following the statement.
After the court’s decision, investors flocked to XRP and significant increases were observed not only in the value of the leading altcoin but also in the rest of the cryptocurrency market. The relatively favorable outcome of the case for the cryptocurrency market prompted many top-level cryptocurrency exchanges such as Coinbase and Kraken to relist XRP, further intensifying the upward trend.