Popular XRP advocate and notable attorney John Deaton recently predicted a comfortable appeal victory by Ripple against the United States Securities and Exchange Commission (SEC). The Managing Partner of ‘The Deaton Law Firm’ says he is willing to bet big on the exchange emerging victorious on appeal.
Founded Belief Or Mere Speculation?
John Deaton’s willingness to bet on an uncertain court judgment follows a recent thread penned by digital asset enthusiast and Australian-based lawyer Bill Morgan. According to the thread, Judge Analisa Torres did not err in her summary judgment decision.
Morgan was of the opinion that the Securities and Exchange Commission (SEC) classified sales of XRP by Ripple into three unique classes; institutional sales, programmatic sales, and other XRP distributions. Following the classification, Judge Torres evaluated each class by applying the popular Howey test.
After evaluation, the Judge discovered major differences in each class. For instance, the Judge discovered that every institutional investor signed agreements with Ripple and expected to earn profits from the firm’s activities.
While institutional investors entered contracts with Ripple, programmatic sales on exchanges did not require the signing of contracts, and purchasers, therefore, did not expect to make profits directly from Ripple’s efforts.
Therefore, according to Morgan, Judge Torres ruled that the sale of XRP to institutional investors amounted to a sale of securities, while that of programmatic sales on virtual exchanges was not.
Deaton Ready To Go All In For Ripple
Reacting to the thread, John Deaton commended Bill Morgan and noted that Judge Torres did not differentiate between Ripple’s XRP sales merely out of “thin air.” He stated that the Judge considered each sale the SEC alleges as securities “and applied the Howey test.” Therefore, given his confidence in the decision, he was willing to wager “significant funds that she doesn’t get reversed on appeal.”
While Deaton may have cause to believe in a favorable appeal outcome, recent developments may instigate some doubts in his prediction. Recently, US District Judge Jed Rakoff, who oversees the SEC’s lawsuit against Terraform Labs, rejected the approach used in Judge Torres’s ruling. This creates a certain unpredictability in the outcome of the upcoming SEC appeal.
In the interim, SEC’s Chair, Gary Gensler, has suggested that an appeal against the decision in the Ripple lawsuit is under strong consideration. While Gensler’s comment does not expressly guarantee an appeal, however; it indicates that the US SEC has not conceded a partial defeat in the suit.
