The case between the US Securities and Exchange Commission (SEC) and Ripple is raging on, pending a ruling which some estimate to be coming relatively soon.
That said, John Deaton, a lawyer representing thousands of XRP holders, has recently reviewed and agreed on a Twitter thread that criticizes the position of the SEC. Although that’s to be expected, it’s interesting to look at some of the arguments in question.
- A patent litigator took it to Twitter to lay down their thoughts on the Ripple v. SEC case, claiming that it’s really not that complicated.
Crypto lawyers can get paid a lot of money, like Ripple’s lawyers, if the issues involved are compliated. But that does not make the issues complicated and is not good public policy. Ripple’s case is not actually that hard. It raises only two real questions.
- The questions themselves, according to the litigator, are: 1. Did Howey (referring to the Howey Test) eliminate the need for an investment contract to actually evidence a share in the enterprise, or were the Howey factors in addition to that fundament requirement of a security, and 2: Did XRP itself or any of Ripple’s XRP sales contracts meet all the requirements of an investment contract.
- According to the legal expert, the answer to the first question is that “Howey summed up the law of investment contracts where the contracts clearly must meet all the requirements.
- The answer to the second question is that “XRP itself nor any of Ripple’s XRP sales contracts involving XRP secured the buyer any financial interest in any common enterprise.”
- The thread goes on, providing a few examples and comparisons which further build up the abovementioned conclusions.
- John Deaton admitted to being one of the “lawyers discussing unnecessary issues.” However, he also said:
I don’t mind the comment because I agree with it. Unfortunately, when the SEC takes the positon that “The XRP Traded, even in the secondary market… represents the investment contract” one is forced to.