The price of XRP spiked by as much as 10% on Tuesday, October 3, after Judge Analisa Torres rejected the US Securities and Exchange Commission’s (SEC) appeal against her original decision on the tokens’ securities status.
With the US crypto sector now one step closer to an uncontested, precedent-setting ruling that could dash the SEC’s claim to dominion over most cryptocurrencies, the renowned crypto lawyer Jeremy Hogan has called the decision a “disaster” for the agency.
As news spread that Judge Torres had thrown out the SEC’s bid to appeal the initial ruling, legal experts quickly declared the decision a victory for Ripple.
Leading the charge, Jeremy Hogan called the news a “disaster” for the SEC.
Significantly, he pointed out that Torres’ latest comments further strengthen Ripple’s case by dismantling one of the SEC’s key arguments in its legal efforts to define XRP as a security.
The SEC has argued that XRP sales on crypto exchanges should be deemed an investment contract based on the principles laid out by the Howey Test.
However, while Torres acknowledged that investors may have bought XRP with profit expectations, the SEC couldn’t prove that these expectations arose from the entrepreneurial or managerial efforts of others during cryptocurrency exchange transactions.
Despite the general consensus that Torres’ latest decision is good news for Ripple, some have pointed out that the battle is far from over.
As one X user explained, the appeal that has been thrown out was what’s known as an “interlocutory appeal,” i.e. a mid-trial appeal that objects to a specific ruling. However, the SEC still has appeal options once the trial concludes.
With Judge Torres effectively dismantling one of the SEC’s primary arguments in its case against XRP’s security status, senior executives at Ripple celebrated the victory.
CEO Brad Garlinghouse said “I’m not a lawyer but it seems the Court just told the SEC: You asked me to apply the “Howey” test, I did, and like it or not, you lost.”
Meanwhile, Ripple’s Chief Legal Officer Stuart Alderoty emphasized the precedent-setting nature of Torres’ original judgement, which he says established once and for all that “XRP is not a security.”