- Legal expert John E. Deaton points to a 2018 SEC memo that might have absolved Ripple’s XRP token sale.
- The debate intensifies over whether digital assets like XRP possess intrinsic value, differentiating them from traditional commodities.
The Ripple-SEC Saga: What an Unrevealed Memo Could Mean
Ripple’s ongoing legal tangle with the U.S. Securities and Exchange Commission (SEC) has taken a fresh twist. Attorney John E. Deaton, a keen observer of the case, indicates that a 2018 internal SEC memo might have held the key to understanding the regulatory body’s stance on XRP. This memo, penned by the commission’s enforcement lawyers, seemingly did not suggest any punitive action against Ripple concerning its XRP sales.
Though the memo hasn’t been made public, owing to privilege clauses, its non-recommendatory nature hints that, as of mid-2018, the SEC enforcement team might not have viewed XRP as a security. This revelation spurs questions regarding the knowledge and intentions of Ripple’s executives, bringing to light whether they were aware of any potential violations of securities regulations.
Digital Assets: Commodities or Something Else?
The intrinsic value of digital assets, including XRP, has become the crux of the argument. Bill Morgan, a legal pundit, recently questioned the SEC’s approach, emphasizing their seeming determination to differentiate digital assets from traditional commodities, such as gold. By Morgan’s logic, the SEC aims to simplify its evaluation using the Howey Test, a legal yardstick that helps in identifying investment contracts.
Morgan stresses that this regulatory concentration on intrinsic value might be misdirected. He posits that the worth of a digital asset isn’t solely based on inherent value. Instead, the functionality and utility it offers could play a pivotal role in determining its value.
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The SEC, however, seems resilient in its stand. The commission is keen on establishing a clear divide between cryptocurrencies and conventional commodities. This approach becomes evident as the SEC pushes back against claims equating cryptocurrencies to physical assets like gold.
Adding another layer to this multifaceted legal landscape, the SEC has recently signaled its readiness for trial during the spring of 2024. Their move comes after a recently lodged appeal request.
While the crypto world eagerly awaits further developments in the Ripple-SEC drama, this unrevealed 2018 memo’s implications could reshape discussions, bringing forth pivotal insights on the regulatory intricacies surrounding digital assets.
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