The lawyer said that the appeal was nowhere close to a setback, something that had been stated on Twitter.
He added that people should not underestimate the significance of the courtroom victory in the lawsuit that was granted by a federal judge.
The comments from the crypto lawyer came after Analisa Torres, the federal district judge, issued a ruling earlier this month in the lawsuit between the SEC and Ripple Labs.
The ruling said that the XRP token is not a security, unless the native token is sold to institutional investors for the purpose of raising funds.
The lawsuit between the SEC and Ripple Labs had been ongoing since December 2020, when the former had filed a case against the latter for conducting an unregistered securities offering to raise $1.3 billion in funds.
Gary Gensler, the chairman of the SEC, said that the agency was disappointed with some aspects of the court’s decision.
This is because these could have a far-reaching impact on other tokens that are also facing regulatory pressure.
On Friday, the federal watchdog submitted court documents in its lawsuit against Terraform Labs and Do Kwon, which suggest that it could soon file an appeal in the Ripple case.
The founder of Crypto Law, Deaton said that even if the SEC does decide to file an appeal, it is still going to take it time to work through the court system.
He said that it would take at least two years for the 2nd circuit to issue a decision and until then, the current ruling would be the law.
According to the ruling from Torres, the sales of the XRP token to public buyers did not fulfill the criteria of the Howey test.
The judge said that this was because the buyers were not expecting to derive profits from the managerial and entrepreneurial efforts of others.
She explained in her decision that because of programmatic sales, the public buyers of the token were not expecting any profits from the efforts of Ripple Labs.
Torres said that while they may have expected to make profits from the XRP token, it was not from the efforts of the company itself.
According to Deaton, even if the SEC decides to challenge the judge’s application of the Howey Test, it is likely that the ruling would remain the same.
This would result in a greater challenge for the agency because it would be a lot more difficult for it to satisfy other factors associated with the Howey test, such as ‘common enterprise’.
Brad Garlinghouse, the CEO of Ripple, said that the entire mess was the SEC’s fault because it did not have any legal jurisdiction and had still tried to regulate crypto.
He added that rather than the enforcement approach, legislation was the way to provide clear rules for the crypto space.