As the well-known litigation between the United States Securities and Exchange Commission (SEC) and Ripple Labs seems to be nearing its conclusion, a prominent legal expert had a few words to say in support of the blockchain startup.
John E. Deaton, a prominent defence attorney and commenter on the case, tweeted on January 16 that the SEC was overreaching with its claims, bringing attention to the Howey analysis the regulator used to declare that the XRP coin was security.
He noted that the SEC’s position, which maintains that the XRP coin is always secure, is proof enough that applying the Howey test to Ripple Labs and XRP is troublesome and complex.
Deaton brought out the SEC’s expert witness’s recantation of his claim that Ripple was a common venture and the 3,000 affidavits proving that first-time XRP customers didn’t know about the company and bought XRP for reasons other than investing.
As he emphasised: “If you read the SEC’s brief closely, it asserts that XRP is the business itself. Indeed, it states that. However, guess what? Additionally, the SEC asserts that XRP itself reflects all of Ripple’s promises, inducements, and efforts since 2013.”
“That is not how a Howey analysis works, and it does not render a token always a secure regardless of the conditions. People who predict the SEC will win without a doubt and that XRP is doomed overestimate the SEC’s odds. The SEC’s claims are exaggerated.”