Ripple vs. SEC: Deaton Says SEC May Have Snatched Defeat From the Jaws of Victory

Vignesh Karunanidhi
Ripple vs. SEC: Deaton Says SEC May Have Snatched Defeat From the Jaws of Victory
Source: NFTs.WTF

Ripple vs. the SEC is one of the most prominent lawsuits that has been dragging on for over two years. The SEC accused Ripple of selling XRP as a security, which has greatly numbed Ripple’s ability to grow over the years.

John E Deaton, the founder of CryptoLaw.US, recently summed up his thoughts and his beliefs on the whole case. He also talks about the SEC’s argument against Ripple.

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SEC stresses the Howey Test to back their argument

Deaton began his summary by quoting the SEC’s theory on the case:

“Defendants do not dispute that they offered and sold XRP in exchange for ‘money,’ which suffices to establish the ‘investment of money aspect’ of the Howey Test. Defendants’ statements and efforts as to XRP…establish the other aspects of the Howey Test as a matter of law.”

Source: Coingape

He also stressed that the SEC is trying to apply the equivalent of the “but for” test to securities laws. Deaton highlighted that the SEC’s theory is that since Ripple executives created XRP and XRPL and also created a secondary market, all XRP constitute securities.

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Deaton also reminded the community of the fact that the SEC tried to allege that all past, present, and future transactions meet the Howey Test, according to law. Stressing other arguments of the SEC, Deaton mentioned that there is a visible inherent flow in the SEC’s conclusory and circular reasoning. He also mentioned that this is why he stated that the “SEC may have snatched defeat from the jaws of victory.”