Pro-XRP attorney Jeremy Hogan says that the historic ruling in the U.S. Securities and Exchange Commission’s (SEC) lawsuit against Ripple will likely withstand an appeal.
In a new YouTube interview with Darren Moore Jr., Hogan says that Judge Analisa Torres ruled in favor of Ripple based on the Howey Test while couching her decision on the facts of the matter.
He says an appellate court would not likely overrule the factual determinations made by Judge Torres, giving her decision a good chance of surviving any legal challenge.
“What Judge Torres did I think was very smart. She made her opinion based on the Howey Test. What she said was, ‘Well, in these programmatic sales, the purchasers did not know who they were buying from, and neither did Ripple know who was buying XRP and therefore there was no expectation of profits. And so she couched her opinion in terms of the facts and that’s more likely to stick.
That’s less likely to be overturned on appeal, because, you’re right, appellate judges don’t like to dig into the facts of the case and say that the trier of fact, which in this case is the judge, was incorrect.”
The Howey Test determines whether certain transactions qualify as investment contracts and are subject to securities laws.
The SEC sued Ripple in late 2020 for allegedly selling XRP as an unregistered security.
Last week, Torres ruled Ripple’s automated, open-market sales of XRP are not securities transactions. However, the judge did rule in the SEC’s favor when deciding Ripple’s direct sales of XRP to institutional participants represented a securities offering.
Hogan also says he believes that the judge’s ruling legally protects retail traders of XRP, but not other digital assets.
“[Torres] explicitly says XRP is not a security of the secondary market. And so she gives us what we really want without making it a part of her official order because it really wasn’t in front of her and I agree with her on that…
So, it protects XRP holders from any argument in the context of XRP that XRP is not a security. Now, it’s just a trial-level order. So non-XRP digital assets are not covered by this order. So this order only applies to XRP. It doesn’t apply to anything else. Now, it’s persuasive authority in those other cases, but it’s not binding on anyone.”
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