With the growing debate around whether the U.S. Securities and Exchange Commission (SEC) is now entitled to appeal immediately, Pro-XRP attorney John Deaton agrees that the SEC can appeal soon now, but “There will be no immediate appeal. Finally, the SEC didn’t dismiss this case because it wanted to get to a faster appeal.”
Pro-XRP Lawyer Deaton Explains Whether SEC Can Appeal Immediately
John E. Deaton on October 21 joined the crypto community’s discussion on whether the U.S. SEC can appeal against Ripple immediately after it dropped charges against Ripple executives. The rationale behind the SEC’s move to drop charges against Ripple CEO Brad Garlinghouse and executive chairman Chris Larsen.
With the SEC voluntarily dismissing claims against Ripple CEO Brad Garlinghouse and executive chairman Chris Larsen, the trial scheduled for April 2024 will not happen, said Deaton. He added that the penalty phase of the case must finish first for a possible appeal by the SEC.
“Although Ran is correct that an appeal by the SEC will happen sooner because the SEC chose to dismiss the case against @bgarlinghouse and @chrislarsensf (because the April 2024 trial will now not happen), it is incorrect to say the SEC can appeal immediately.”
Citing the LBRY lawsuit as an example, Deaton highlighted that the summary judgment decision was announced in November 2022. The appeal to judgment became only possible after 8 months of the ruling. Thus, LBRY filed an appeal on September 7, after additional discovery, including interrogatories, and requests for production of documents. The SEC reduced the fines from $23 million to $130K.
In the Ripple lawsuit, the SEC eyes $770 million. Deaton believes Ripple will argue ODL transactions should be exempt, along with legitimate business costs.
However, an immediate appeal by the SEC is not likely to happen. The regulator dismissed the case for failing to prove Ripple executives’ aided and abetted charges. “The witness list of subpoenas for certain individuals to testify was going to be interesting, said Deaton.”
Will Ripple Settle on Institutional Sales of XRP?
With the scheduled trial on the SEC claim against Ripple executives now invalid, Ripple’s attorney sent a letter to Judge Torres for a potential briefing schedule on pending issues after November 9.
Ripple seeks remedies for its Section 5 of security laws violations with respect to its institutional sales of XRP. The odds of a settlement seem higher amid the latest developments. However, the company will challenge the SEC regarding its lack of authority to regulate the crypto industry.
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