New York Southern District Judge Torres, in a landmark decision, won a major victory for Ripple and XRP holders by rejecting the SEC's claim that XRP sold on exchanges is a security.
However, the judge had determined that institutional sales of XRP by Ripple are securities and are regulated.
However, the SEC was not satisfied with the outcome and has hinted that it will appeal the decision. This has raised some concerns among the XRP community about the future of litigation and the status of XRP.
However, XRP attorney John E Deaton, who represents thousands of XRP altcoin holders in a class action lawsuit against the SEC, reassured his followers that the appeal would not lead to a setback, explaining why in a series of tweets.
Deaton argued that it would take at least two years for the appeal to be decided by the 2nd Circuit Court of Appeals, and that the Torres decision would remain law until then. Deaton also predicted that the 2nd Circuit would not overturn the judge's decision regarding the third criterion of the Howey test, which determines whether an investment contract exists.
Deaton also clarified that even if the 2nd Circuit Court of Appeals disagreed with Torres on the third criterion, it would not mean that the SEC would win on programmatic sales. He said that Torres would then have to apply the other two factors of the Howey test, namely profit expectation and joint venture factors, and could decide in favor of Ripple and XRP holders on these grounds.
Deaton concluded by saying that the judge's decision is a significant win for XRP and its holders, as well as Ripple, and that no one should underestimate its importance.
*Not investment advice.
