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The SEC Should Challenge the XRP Ruling and Appeal


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In the wake of Ripple’s victory over the US Securities and Exchange Commission (SEC), retired securities attorney Mark Vargil subscriber His skeptical view on social media. Despite his reservations, he acknowledged that cryptocurrency enthusiasts should find solace in certain aspects of the ruling.

Secondary market trading claims of the Saudi Electricity Company

Fargel is concerned that the court’s reasoning could challenge the SEC’s allegations about the trading of assets in the secondary market, including cryptocurrencies. He argues that Howey relates to economic reality and has no rationale for such differentiated treatment.

Thus, he anticipates that investors cannot expect profits from a third party if the asset is purchased indirectly. However, this conclusion may be reversible.

Vargil made his position clear, saying he had no vested interest in the case. However, he thought both sides would appeal, adding that the regulator had a slightly better chance of reversing the ruling on “automated sales”.

It justifies that the ruling may not be appealed impact Pending issues, especially those related to Coinbase, Binance, and the rest.

“I don’t see how they wouldn’t appeal this; aside from the Ripple case itself, the court’s reasoning, if followed, would jeopardize future cases (particularly the pending cases against cryptocurrency exchanges).

The lawyer asserts that XRP is not a security

In response to Vargil’s comments, John Deaton, a pro-XRP attorney, participated. Although he worries about the possibility of drawn-out legal battles, he does see an upside amid the general uncertainty.

He believes that even if the SEC wins an appeal against automated sales, the court’s decision that XRP itself is not a security will stand firm.

Furthermore, Deaton questioned whether Ripple would approve a preliminary appeal on the on-demand liquidity sales (ODL) of XRP while emphasizing the urgency of a fair and speedy resolution.

The case has taken three years, Deaton said, not to mention the 30-month investigation that has cast a shadow over the company and its executives, including Brad Garlinghouse, CEO.

In his argument, Deaton argued that the SEC’s victory over some of the sales was due to the application of the Howey test to the facts presented. Specifically, he objected to early appeal becoming the prevailing law for the next two to three years.

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