Former Securities and Exchange Commission (SEC) Chair Jay Clayton recently commented on the long-running battle between the SEC and Ripple. Going by his remarks, there is reason to believe that the case isn’t coming to an end anytime soon.
SEC Could Appeal Court’s Ruling
In an interview with Henri Arslanian, the host of the Future of Money Podcast, Clayton hinted that the Commission could appeal Judge Analisa Torres’ ruling. While commenting on how the court ruled that programmatic sales didn’t qualify as securities, he alluded to whether or not the appellate court would reach a similar conclusion upon appeal.
The XRP community isn’t taking Clayton’s remarks lightly, considering that the former SEC Chair could still be in the loop about what goes on in the Commission. Moreover, Clayton’s administration commenced the SEC’s case against Ripple. As such, this is a case in which he still has some sort of interest.
Clayton also spoke about seeing what the court’s ruling about the institutional sales would be when it goes on appeal. That statement raised the possibility of Ripple appealing Judge Torres’ ruling that the company’s institutional sales were securities transactions.
Clayton seemed convinced that Judge Torres made the right decision in that instance, suggesting that such sales come under securities transactions for capital raising. He also reaffirmed that this was under the SEC’s jurisdiction, stating that the Commission “rigorously regulates the raising of capital from the general public, and that has not changed.”
The SEC Unlikely To Win On Appeal Against Ripple
Pro-XRP legal expert Bill Morgan suggested that the Commission would likely lose if it appealed Judge Torres’ ruling on programmatic sales. He noted how the Judge had “structured her reasoning and the application of the Howey legal principles around the facts” of each category of sales, which the SEC admitted were factually different.
Judge Torres’ discernment is said to have led to her separating the XRP token from Ripple’s sale of the token. Morgan believes that this particular action has made it difficult for the SEC to “successfully appeal.” In other words, determining whether a transaction qualifies as a security depends on the facts, and that was why the Judge wasn’t quick to rule that XRP was a security.
Meanwhile, he added that Ripple’s only “viable ground of appeal” relates to the ODL contracts since Judge Torres didn’t separate them from institutional sales. As such, Ripple might need to appeal that decision to ensure that there is legal clarity on whether or not ODL transactions are securities.
