Deaton Says Judge Torres Won’t Approve SEC Appeal Request

Attorney John Deaton explained why Judge Torres would not approve the appeal request from the US SEC.

Attorney John Deaton, the founder of Crypto-Law.US, speculates that U.S. District Judge Analisa Torres will not approve the SEC’s request to appeal her decision in the Ripple lawsuit.

The prominent cryptocurrency advocate made this known in a recent Twitter exchange with former SEC director Marc Fagel and other XRP enthusiasts.

During the discussion, an XRP enthusiast claimed Deaton stated that none of the parties can appeal Judge Torres’ ruling until after the trial issue has been resolved.

However, Fagel said any of the parties could seek an immediate appeal, adding that it is up to the court to approve the request.

Judge Torres Won’t Accept SEC Appeal Request

In response, Deaton clarified that he never implied that there would not be an appeal before a jury verdict. He pointed out that there is no immediate right to an appeal.

Additionally, Deaton said any of the parties could ask Judge Torres to approve their appeal requests and subsequently ask the Second Circuit to accept them.

However, he speculated that Judge Torres would not accept the SEC’s appeal request.

I didn’t mean to imply that there can’t be an appeal before a jury verdict, only that there isn’t an immediate right to an appeal. Either side can ask Judge Torres to allow it and then ask the 2nd Circuit to accept. I don’t see Judge Torres approving it because the SEC sought…

— John E Deaton (@JohnEDeaton1) July 16, 2023

Per Deaton, the regulatory agency sought summary judgment per the Howey test. He added that the judge applied the test to each XRP transaction the SEC claimed satisfied Howey.

“The Court agreed that the Howey test was controlling and applied it accordingly. In essence, the judge applied a non-controversial 76-year-old well-settled Supreme Court test to the facts of the case,” Deaton added.

Furthermore, Deaton questioned the possibility of Judge Torres approving an appeal when her application of the Howey test to each XRP transaction, as requested by the SEC, is straightforward.

“Maybe the parties submit something in writing that can persuade her, but I don’t see it at this point,” said Deaton.

Deaton Doesn’t Expect Ripple to Appeal

Furthermore, Deaton said he would be shocked to see Ripple agree to an interlocutory appeal, citing ODL-related XRP sales as a case in point. The pro-XRP lawyer does not expect Ripple to agree to an early appeal of Judge Torres’ decision. Objecting to such an early appeal will allow Torres’ decision to be the law of the land for the next two to three years.

Recall that while Judge Torres ruled that Ripple’s programmatic XRP sales are not securities, she ruled that the company’s past direct XRP sales to institutional investors constitute securities. Notably, she also concluded that XRP itself is not a security.

The judge also ruled that a trial will be held regarding Ripple’s XRP sales to institutional clients. It bears mentioning that the trial would be on whether Ripple executives Brad Garlinghouse and Chris Larsen aided the company in its XRP sale to institutional clients.

As reported, the SEC has refused to disclose whether it will appeal the judge’s ruling.