Ongoing SEC vs. Ripple Case
The legal battle between Ripple and the United States Securities and Exchange Commission (SEC) continues, with a decision expected by many to be made soon.
John Deaton, an attorney advocating for thousands of XRP holders, has recently expressed agreement with a Twitter thread challenging the SEC’s position. While this endorsement is anticipated, it’s intriguing to delve into the arguments presented.
Twitter Critique on the SEC vs. Ripple Lawsuit
A patent litigator used Twitter to express their views on the Ripple vs. SEC lawsuit, asserting that it’s not as complex as it appears. They argue that the high compensation for crypto lawyers, like those representing Ripple, does not equate to complexity of the issues or contribute to sound public policy. According to this expert, Ripple’s case is relatively straightforward and hinges on two primary questions.
The litigator’s questions are as follows: 1. Did the Howey Test (referring to the measure used to determine whether a transaction is an investment contract) override the need for an investment contract to actually represent a stake in the enterprise, or were the Howey factors supplemental to that basic requirement of a security? And 2. Did XRP itself or any of Ripple’s XRP sales contracts fulfill all the prerequisites of an investment contract?
Expert’s Response to the Questions
The legal commentator answers the first question by asserting that “Howey encapsulated the law of investment contracts where the contracts undeniably must meet all the stipulations.”
For the second query, the response is that “Neither XRP itself nor any of Ripple’s XRP sales contracts conferred any financial stake in a common enterprise to the buyer.”
The Twitter thread expands further on these answers, offering examples and comparisons to reinforce the points made.
John Deaton’s View on the Matter
John Deaton concedes that he is among the “lawyers discussing superfluous issues”. However, he supports the critical perspective, stating, “I don’t mind the comment because I agree with it. Regrettably, when the SEC asserts that ‘The XRP Traded, even in the secondary market… signifies the investment contract,’ one is compelled to engage in such discussions.”
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