- SEC alters its language, stating that XRP is “nothing but computer code with no inherent value” in its ongoing lawsuit against Ripple Labs.
- Legal experts challenge SEC’s stance, arguing it is straying from its mission and purpose in treating cryptocurrencies inconsistently.
SEC’s XRP Stance: A Linguistic Pivot with Underlying Implications
In a court proceeding that continues to oscillate between legal nuance and headline drama, the United States Securities and Exchange Commission (SEC) has taken an unexpected linguistic pivot concerning Ripple’s digital asset, XRP. Remember, the SEC filed a lawsuit against Ripple Labs, accusing it of conducting unregistered sales of XRP, which the agency initially categorized as a security. Now, they claim that XRP is
“nothing but computer code with no inherent value,”
a significant departure from their original complaint.
Dissecting the SEC’s New Language: An Analytic Viewpoint
What does this alteration in language signify? The SEC’s new stance feeds into the ongoing debate surrounding the Howey Test—a legal framework employed to determine whether a financial asset can be classified as a security. Bill Morgan, a legal expert in the cryptocurrency domain, suggests that the SEC aims to make its case more manageable by convincing the court that cryptocurrencies lack inherent value. This would satisfy the third prong of the Howey Test, focusing on the efforts of issuers to imbue value into otherwise valueless assets.
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However, Morgan contends that this is a flawed approach. The value of XRP, he argues, is intrinsically tied to its functionalities and cannot be isolated from the XRP Ledger (XRPL). Likening it to wheels, which derive their value not in isolation but in combination, Morgan challenges the SEC’s narrow perspective.
Inconsistency and Mission Drift: What’s the SEC’s Real Agenda?
This change in language is not merely a matter of semantics but reveals potential cracks in the SEC’s case and mission. John E. Deaton, another recognized attorney in the field, opines that the SEC is losing sight of its intended purpose. The agency’s contradictory stances on different cryptocurrencies, illustrated by clear statements on Ethereum and Bitcoin but murky language on XRP, raise questions about the SEC’s overall agenda.
XRP’s current trading price stands at $0.5, an uptick of 0.31% in the last 24 hours, as per data from CoinMarketCap. This lackluster price performance is often attributed to the ongoing legal uncertainties brought upon by the SEC’s enforcement efforts. Thus, as the case unfolds, the SEC’s language and approach not only impact Ripple and XRP but also leave an indelible mark on the broader cryptocurrency landscape.
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