Lawyers representing the United States Securities and Exchange Commission (SEC) stated in a separate filing on Friday that a part of the ruling on Ripple’s partial victory contradicted existing law. In response to a similar case with defunct crypto project Terraform Labs, the SEC asserted that the court decision was baseless and the regulator intends to appeal the decision soon.
“Respectfully, those portions of Ripple were wrongly decided, and this court should not follow them. SEC staff is considering various available avenues for further review and intends to recommend that the SEC seek such review,” the lawyer stated in response to a lawsuit with Terra Labs.
The Do Kwon-owned company last week filed a lawsuit with the court, demanding that the prosecutors cancel out its case with the SEC, citing that a court ruled in its favor in a similar case pertaining to Ripple. The plaintiff then filed the Friday response to the United States District Court, Southern District of New York, stating that the ruling in view was wrongly decided.
Ruling Violates Basic Law
The SEC stated that the Ripple ruling violated and made subjective basic rules like the Howey Test, which has stood the test of time as a parameter for checking whether assets are securities. According to the lawyers, the distinction in expectations between institutional and retail traders was against existing laws governing asset classifications.
Condemning the ruling, the US SEC representatives prompted the court to dismiss Terraform Labs’s request to dismiss the case. They then stated that the SEC is preparing to argue the Ripple ruling in court.
Potential Appeal Not a Setback
Responding to Friday’s lawsuit, Crypto Law founder John E. Deaton stated that the potential appeal is not a setback for Ripple. In a tweet on Saturday, Deaton noted that it would take at least two years for the 2nd Circuit Court, where the SEC would file the appeal, to decide on the case.
Furthermore, Deaton noted that even if the 2nd Circuit ruled against Ripple’s partial victory, it wouldn’t signify a win for the US regulator on programmatic sales.
“Don’t let anyone underestimate how significant this win is for XRP, XRP holders, and Ripple,” Deaton stated.
