In recent discussions led by John Deaton, the Founder of CryptolawUS and a prominent advocate for XRP holders, critical points have come to light regarding the Securities and Exchange Commission’s (SEC) case against Ripple. Deaton’s insights, in addition to notable contributions from crypto enthusiast Nietzbux, have sparked conversations about the SEC’s inability to convincingly argue that XRP is a security. Furthermore, it is suggested that the SEC was seemingly “out-lawyered” by Ripple and the XRP community.
Evidentiary Weaknesses Exposed in the SEC’s Case
Nietzbux highlights that Ripple’s legal brief effectively dismantles the SEC’s case by revealing that most of the Howey Test requirements, which are used to determine an asset’s security classification, were not met. Importantly, the Howey Test demands the satisfaction of all its criteria for an asset to be deemed a security.
John Deaton, a pro-XRP lawyer and the founder of CryptolawUS, submitted an amicus brief that meticulously disassembled the SEC’s argument. He unveiled various frailties in the SEC’s evidence. Notably, the SEC relied on a 2014 tweet by Chris Larsen, Ripple’s co-founder, for certain arguments but failed to provide evidence that any of the six specified XRP holders in the motion to intervene were active on Twitter in 2014.
Deaton also underscored that the SEC based some cases on a 2014 brochure targeting 100 potential investors. However, the SEC couldn’t substantiate that these investors had indeed relied on the brochure when purchasing XRP. Additionally, Deaton invalidated the SEC’s argument that Ripple’s website was the strongest piece of evidence by noting that CNBC and other non-Ripple entities also provided information about XRP acquisition.
Questions Surrounding the SEC’s Motives and Credibility
In a thought-provoking conclusion, Deaton raises doubts about the SEC’s true intentions, suggesting that the case might have been “dead in the water from the start.” This implies that the SEC’s actions may not be solely about upholding securities laws but could involve undisclosed motives. Such speculations cast a shadow over the SEC’s credibility and the objectives driving this significant legal battle.
Nietzbux concurred with Deaton’s assessments, emphasizing that the SEC was seemingly “out-lawyered” by Ripple, and its factual position was “objectively wrong.”
In essence, the heart of the matter comes down to the art of lawyering. It’s not merely about whether XRP qualifies as a security, but whether the SEC can persuasively argue its case in court. With the well-crafted amicus brief by Deaton and Ripple’s robust legal defense, the SEC appears to be navigating uncertain waters in this legal dispute.