Attorney Deaton said top SEC officials are in a heated debate regarding the commission’s next action in the Ripple lawsuit.
The crypto community has debated the SEC’s next move in the Ripple case. Several crypto and legal experts have predicted that the commission will appeal Judge Analisa Torres’ decision.
The SEC has been hinting at plans to have the ruling reversed. This trend has compounded existing speculations that the commission will appeal.
Deaton Not Convinced SEC Will Appeal
Interestingly, Attorney John Deaton, the Managing Partner of the Deaton Law Firm, recently addressed the million-dollar question of whether the SEC will file an appeal in the Ripple case.
Will The SEC Appeal? @JohnEDeaton1 pic.twitter.com/za231sIOdE
— Digital Asset Investor.XRP (@digitalassetbuy) July 25, 2023
During a Crypto-Law.US broadcast yesterday, Attorney Deaton said he is not convinced that the SEC would appeal Judge Torres’ decision. However, he stressed that it is also possible that the regulatory agency may appeal the ruling.
SEC Officials Are Split
Per Deaton, whether the SEC will appeal the ruling is the hottest debate among senior SEC officials. He noted that some officials may suggest the regulator should not appeal the decision.
“Some [officials] would say don’t appeal and then go after other tokens,” said Deaton.
In this scenario, Deaton said the SEC could argue “facts and circumstances” while describing XRP as a unique story not shared by other tokens.
According to Deaton, these SEC officials may suggest that the regulator distinguish XRP from other cryptos to avoid the risks of having the Second Circuit affirm Judge Torres’ decision.
However, some other officials could advise the SEC to appeal Judge Torres’ ruling due to its tendency to impact the commission’s lawsuit against San Francisco-based crypto exchange Coinbase.
“There are going to be people at the SEC that will say we have to appeal this decision because of its impact on the Coinbase litigation and others,” Deaton added.
It bears mentioning that the Coinbase lawsuit is also in the Southern District of New York (SDNY), alongside the Ripple case.
Greater Risks for SEC If Second Circuit Affirms Judge Torres’ Ruling
Per Deaton, if the Second Circuit affirms Judge Torres’ decision, the SEC’s regulation by enforcement agenda in the crypto space will end.
“[This is] because the entire Second Circuit will be governed by that decision,” said Deaton.
Although Deaton acknowledged that the Second Circuit affirming Ripple’s victory may not be a binding precedent for other circuits, he noted that the ruling would be massively persuasive to other judges.
“I can assure you that the Second Circuit decision [affirming Ripple’s victory] will be massively persuasive,” said Deaton.
SEC to File Interlocutory Appeal Within 2 Weeks
Notably, Attorney Deaton’s remarks come after top legal expert James “MetaLawMan” Murphy predicted that the SEC would file an interlocutory appeal within the next two weeks.
Per MetaLawMan, if the SEC wants to file an interlocutory appeal, the regulator would need permission from Judge Torres and the Second Circuit since there are still unresolved issues in the case.
However, the SEC can avoid seeking approval from the judge by dropping its case against Ripple executives Brad Garlinghouse and Chris Larsen.
Furthermore, MetaLawMan speculated that the SEC could choose the option of a trial or a settlement as its next move.
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