According to a crypto legal expert, a victory for Ripple over U.S. Securities and Exchange Commissions (SEC) is the most likely outcome of the XRP lawsuit.
The SEC sued Ripple in late 2020, alleging that the payments firm sold the crypto asset XRP as an unregistered security.
Attorney Jeremy Hogan informs his 157,000 YouTube Subscribers that he sees Ripple winning summary judgment, as he believes XRP is not a security.
Hogan says there are two reasons for this outcome. According to the crypto legal expert, the first reason is that Ripple did not have a legal obligation to XRP buyers after the sale.
Hogan supports his thesis with a Paradigm Operations amicus brief.
“In [Paradigm’s] brief, it cites to the work of one its law firms… They reviewed 266 legal decisions related to securities violations, and in their brief on page two it states:
‘A comprehensive analysis of federal and appellate law reveals that no authority exists to support the SEC’s attempt to transmute the Howey analysis of an investment contract transaction into a conclusion about the underlying asset. In every application of Howey where an investment contract was found, there was some identifiable legal relationship between an ostensible issuer and the investor providing investment capital.’
Ripple has proven that there is no ongoing legal relationship with XRP buyers. There’s just none, and the SEC has failed to address that problem.”
Hogan emphasizes that the law requires an “investment contract” and not a “sales contract.” The lawyer notes that Ripple sold XRP without any legal promise to do anything further, which is the sale of an asset and not a security.
Hogan then focuses on the second prong in the Howey test. This states that an investment agreement is valid if the common enterprise is present. The crypto legal expert says there are three main issues facing the SEC in this area.
“First, how can any purchaser have reasonably relied on Ripple to increase XRP’s price when Ripple had no post-sale obligations to them? It’s like buying a Tesla and then suing Elon Musk when it fails to increase in value…
Ripple and John Deaton have submitted hundreds of affidavits to the SEC from actual XRP owners. Many of these holders have never heard of Ripple before they purchased XRP.
And third, while the SEC has apparently abandoned its expert witness on the issue as to whether Ripple’s efforts had any effect on the price of XRP, Ripple’s expert witness analysis is that for the most part and especially since 2018… the price of XRP moves based on the crypto market, in sync, and it does not really move with any business moves that Ripple makes.”
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