The Ripple vs. SEC Saga: Summary Judgment to Shape XRP’s Regulatory Status
The post The Ripple vs. SEC Saga: Summary Judgment to Shape XRP’s Regulatory Status appeared first on Coinpedia Fintech News
The long-standing legal dispute between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) is entering its final stages, with XRP holders anxiously awaiting the Summary Judgment that could decide the fate of XRP’s classification as a security. As the outcome hangs in the balance, lawyer John Deaton sheds light on the matter, providing clarity to investors.
Yes, I said there are people like you out there as well. And, if Ripple had direct contact with you and sold you XRP, there is a valid argument that the Howey test was met because in that scenario 1) you gave to ripple for XRP; 2) you entered into a common enterprise with… https://t.co/Sy9Zr94bOO
— John E Deaton (@JohnEDeaton1) June 24, 2023
A prominent XRP holder recently shared their investment rationale, highlighting Ripple’s association with David Schwart, the company’s Chief Technology Officer, and former NSA employee. The investor explained that their decision to invest in XRP in 2016 was based on the belief that banks might adopt cryptocurrency in the future. They made their initial purchase at a price of $0.10.
XRP’s Future Hangs in Balance?
John Deaton, the attorney representing XRP holders, emphasizes the importance of investigating whether Ripple Labs directly sold XRP to the buyer in question. According to Deaton, if Ripple had direct involvement in the transaction, it could support the argument that XRP meets the requirements of the Howey test—a test used to determine the security classification of an asset.
Deaton also notes that the situation would be different if the buyer did not acquire XRP directly from Ripple and had no contractual relationship with the blockchain firm. In cases where XRP is obtained for non-investment purposes, such as conducting transactions on the ledger, the scenario would be dissimilar.
However, Deaton argues that even if Ripple sold XRP as an investment contract, it does not automatically classify XRP as a security. The nature of the transaction and the parties involved play a crucial role in determining its regulatory status.
The impending Summary Judgment in the legal proceedings will provide essential insights into the classification of XRP and its ramifications for Ripple Labs and XRP holders. The outcome of this debate will shape the future of XRP and its regulatory status, making it a pivotal moment for all parties involved.
Filed under: Bitcoin - @ June 26, 2023 3:05 am