Deaton Clarifies: XRP Transactions Remain Non-Securities Despite SEC Appeal

• Attorney John Deaton challenges the notion that XRP transactions might be deemed securities, irrespective of the SEC’s appeal outcome.
• The SEC’s appeal is based on Judge Torres’ differentiation between Ripple’s institutional and retail XRP sales.

Deaton Debunks XRP Misconceptions

In the midst of legal rumbles surrounding Ripple and its native cryptocurrency, XRP, Attorney John Deaton has once again stepped forward to dispel rising concerns. A recent narrative has taken root, suggesting that if Judge Analisa Torres gives a nod to the SEC’s interlocutory appeal request, XRP transactions might predominantly be seen as securities.

Dissecting the SEC’s Appeal Implications

Reacting to this assertion, Deaton highlighted the inaccuracy of such a belief, labeling it as FUD (Fear, Uncertainty, & Doubt) in the cryptocurrency world. He underscored that even if Judge Torres accedes to the SEC’s appeal, it doesn’t automatically brand XRP transactions as securities. Deaton further remarked,

“Just because the SEC claims it is, doesn’t make it so.”

https://twitter.com/JohnEDeaton1/status/1689971847750623232

In the broader picture, Deaton provided evidence wherein the SEC admitted that Judge Torres was the designated authority to assess the validity of its contentions against Ripple. Upon assessment, Judge Torres applied the ‘Howey Test’—a precedent to determine whether an asset qualifies as a security—and repudiated the SEC’s claim. In Deaton’s perspective, the SEC’s claim isn’t synonymous with the law.

The present legal scenario stems from the SEC’s intention to challenge Judge Torres’ judgment regarding Ripple’s XRP sales to the public. In a recent move, the regulatory body sought approval for an interlocutory appeal. This appeal aims to scrutinize Ripple’s systematic XRP sales in secondary markets and other distributions, especially since these transactions were deemed non-securities by the judge.

The SEC argues that this ruling raises substantial legal discrepancies, referencing Judge Jed Rakoff’s observations in a parallel SEC vs. Terra lawsuit. Notably, Judge Rakoff has contended Judge Torres’ separation of institutional and general XRP purchasers. According to him, the Howey test does not make such distinctions.

Amidst this discussion, another legal voice, pro-XRP attorney Bill Morgan, weighed in. He furnished documentation indicating that it was the SEC that initially categorized Ripple’s XRP sales into three distinct segments: programmatic sales, institutional sales, and other distributions. Morgan elaborated that Judge Torres merely adhered to this SEC-provided framework, applying the Howey test accordingly. In a spirited response, Deaton expressed firm confidence that the appellate court would uphold Judge Torres’ initial decision.

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