- Ripple lawyer John Deaton has criticized the SEC’s arguments in the ongoing legal battle between Ripple and the SEC.
- Deaton claims that the SEC’s argument extends beyond the present and into the future, capturing all possible future sales, even in countries that may recognize XRP as a fiat currency in the future.
Ripple lawyer slams SEC’s arguments
Pro-XRP lawyer John Deaton has claimed that the SEC had a strong case against Ripple, but has now undermined its position. Deaton cited a legal document, referred to as “ECF 640,” which states that the purchase of XRP was an investment of money into a common enterprise. However, he also criticized the SEC’s argument, saying that it extends beyond the present and into the future, capturing all possible future sales, even in countries that may recognize XRP as a fiat currency in the future.
Deaton’s criticism of the SEC’s argument is supported by the legal document, which states that even if some country recognizes XRP as a fiat currency in the future, it would still be considered a security. He also compared the SEC’s theory to
“arguing individual oranges were not only oranges, but also represented the investment contract with the W.J. Howey Company.”
Deaton believes that innocent holders are being severely harmed by the SEC’s theory.
The Howey scope
Deaton further argued that the SEC is not allowed to shortcut the Howey analysis, a legal test used to determine whether a transaction involves an investment contract. He claims that the SEC cannot allege that each and every sale of XRP, from the beginning of time until the end of the world, meets all three prongs of the Howey test. According to Deaton, in the 76 years since the Howey test was established, there has not been a single case where the underlying asset in an investment contract was always considered a security.
He also claims that there has not been a single case where an investment contract was found, and there was no privity (a legal relationship) between the buyer and the promoter.
In conclusion, the ongoing legal battle between Ripple and the SEC continues, with Ripple lawyer John Deaton criticizing the SEC’s arguments as “ridiculous” and “shameful.” The outcome of this case is expected to have significant implications for the broader cryptocurrency industry.