The case between the US Securities and Exchange Commission (SEC) and Ripple is still ongoing, with a ruling expected soon.
However, John Deaton, a lawyer representing thousands of XRP holders, recently reviewed and agreed with a Twitter thread criticizing the SEC’s position. While this is expected, it is interesting to examine some of the arguments raised.
Crypto lawyers can get paid a lot of money, like Ripple’s lawyers, if the issues involved are complicated. 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.
— Sandy Seth (@CryptoDukeji) June 19, 2023
- A patent litigator took to Twitter to share their thoughts on the Ripple v. SEC case, asserting that it is not as complicated as it seems.
Crypto lawyers can get paid a lot of money, like Ripple’s lawyers, if the issues involved are complicated. 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.
- According to the litigator, the two questions at the heart of the case 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 fundamental requirement of a security? 2: Did XRP itself or any of Ripple’s XRP sales contracts meet all the requirements of an investment contract.
- The legal expert believes that 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 provides examples and comparisons that support these conclusions.
- John Deaton acknowledged being one of the “lawyers discussing unnecessary issues.” However, he also stated:
I don’t mind the comment because I agree with it. Unfortunately, when the SEC takes the position that “The XRP Traded, even in the secondary market… represents the investment contract,” one is forced to.
