Nick 🤠

On the SEC appealing the recent Torres decision: In my article in @coindesk (coindesk.com/consensus-magaz…) I write: "It does not even permanently resolve the specific legal issues on which the judge ruled, because the SEC can at some point appeal. Whether there will be an appeal is to be seen. The SEC may wish to set the Ripple case, a long, exhausting and expensive litigation, aside in favor of a new cohort of cases that this chairman and his staff actually had a hand in building. That may be the more politically shrewd course of action, but it is more likely the SEC will try to immediately appeal this decision to the nationally influential Second Circuit, where the agency has an impressive track record of wins." Let's be clear as to what that means. 1) Neither SEC nor Ripple could appeal this decision now without asking Judge Torres for permission. That would require some briefing by the parties. While its a close call, I suspect that Judge Torres may give permission to seek an appeal in the Second Circuit because (a) the case has broad implications for the crypto economy and (b) it is arguably taking a new position as to the application of the law, and thus Second Circuit review at this stage may actually be more efficient than review after final judgment. 2) After receiving Torres' leave to file an appeal, the appealing party (or perhaps both) would then need to seek the permission of the Second Circuit to file their appeal. This requires some briefing/convincing of that appeals court that the appeal at this time, rather than at final judgment, is proper. While the Second Circuit often declines to take up cases that aren't final, they can choose to take up an unfinished case that presents a really important and/or really novel issue that it makes sense to opine on now rather than much later. 3) If the 2d Cir. gave the 'okay' for the appeal, then the parties have to file their briefs and schedule oral argument, which will take many many months. And then after oral argument, it presumably would take months longer for the 2d Cir. to reach a decision. During that time, the trial court probably adjourns the case (presses pause) but there's a small chance that it could decide to go forward with the aiding and abetting trial. I may have that wrong - if subject matter jurisdiction over the whole thing transfers to the 2d Cir. or not - I'm not remember that well. 4) Whoever loses in the 2d Cir. could decide to seek "en banc" review, which means that the 2d Cir. would rehear the case but instead of only three judges presiding, the entire 2d Cir. (13 judges!), would read the briefs and listen to the oral argument. This means the appeal takes at least twice as long, and really only happens when the issue present is something the whole 2d Cir. thinks is interesting and important enough to get this type of treatment. 5) If the SEC loses in the 2d Cir., I doubt they go to the Supreme Court, which they view as unfavorable to administrative agencies generally, and which has no reason to take a "disagreement of federal law" case because there is currently no disagreement between federal appellate circuits. If Ripple loses, however, they would most certainly appeal to the USSC and argue that the SEC has no jurisdiction in this space whatsoever, and that their substantive and procedural posture has been in gross violation of their Congressional mandate. Whether the USSC takes it up is hard to say, but that't they type of case they generally have been accepting. 6) If the USSC took up the case, we are talking YEARS before this thing is done and the law is settled, but if the USSC did get involved, the outcome is more likely an order instructing the district court to grant Ripple's summary judgment motion in full OR reversing the 2d Circuit and affirming Judge Torres' decision. SEC may not want to appeal because they know that this starts a road that ends up at the USSC where they do NOT like their chances, as their overreach will become the litigated issue.