The US Securities and Exchange Commission (SEC) has filed an interlocutory appeal against the ruling of Judge Sarah Netburn that granted Ripple access to the agency’s internal documents regarding cryptocurrencies. This move by the SEC has been widely criticized by the crypto community, especially by John Deaton, the lawyer representing over 60,000 XRP holders in a class action lawsuit against the SEC.
In a recent interview with CryptoLaw, Deaton explained why he thinks the SEC’s appeal is a big mistake and how it could backfire on the agency. He said that the appeal is a sign of desperation and weakness, as it shows that the SEC is afraid of what Ripple might find in its internal communications. He also said that the appeal is unlikely to succeed, as the standard of review for interlocutory appeals is very high and the SEC has not shown any irreparable harm or clear error by the lower court.
Deaton argued that the SEC’s appeal could actually benefit Ripple and XRP holders, as it could delay the discovery process and give more time for the parties to reach a settlement. He also said that the appeal could expose more inconsistencies and contradictions in the SEC’s arguments and actions regarding crypto regulation. He pointed out that the SEC has been inconsistent in applying the Howey test to different cryptocurrencies, and that it has not provided clear guidance to the market on what constitutes a security or not.
Deaton concluded that the SEC’s appeal is a big mistake that could cost the agency its credibility and reputation. He said that the SEC should instead focus on providing clarity and fairness to the crypto industry, and that it should respect the rights and interests of XRP holders who have been harmed by its lawsuit against Ripple.
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