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Pro-Ripple Lawyer Blasts SEC's Defense as XRP Gains Edge on This Argument

Mon, 05/15/2023 - 11:07
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Tomiwabold Olajide
XRP gains edge based on this recent argument
Pro-Ripple Lawyer Blasts SEC's Defense as XRP Gains Edge on This Argument
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CryptoLaw founder John Deaton, who is also XRP holders' attorney in the Ripple-SEC lawsuit, has blasted the United States Securities and Exchange Commission (SEC) for the inconsistencies in its defense concerning the ongoing Ripple lawsuit.

"Let's not forget the SEC's schizophrenic theory regarding what constitutes the common enterprise in the case," John Deaton tweeted.

Deaton stated that, at first, the SEC claimed Ripple was the "common enterprise." Then Ripple forced the SEC to concede that XRP holders receive no interest in the firm by owning XRP tokens.

The SEC then shifted its theory and said the entire XRP ecosystem constituted the common enterprise, including all XRP holders in the world, all the exchanges that list XRP and all the vendors or companies that accept XRP as a form of payment.

Ripple Ally v. SEC Takes New Turn as Commission Withdraws Request for Disgorgement

He continued that for the SEC to try and prove such a ridiculously overboard claim, it intended to rely on an expert witness who testified that all XRP holders must rely on Ripple. The good news is that this expert witness was excluded by the judge.

Instead of conceding, the SEC, once again, shifted its common enterprise theory, abandoning its earlier claims in favor of a new theory: XRP itself represents the common enterprise. Deaton calls this "a schizophrenic defense."

In a recent tweet, Deaton criticized the agency, saying, "The SEC is so arrogant it ignores the law and brags about it." The CryptoLaw founder referred to Ripple's general counsel's comments on the SEC's unsuccessful argument as regards investment in a "common enterprise."

XRP gains edge based on this argument

Ripple's Chief Legal Officer Stuart Alderoty highlighted some facts in the Revak case that expose the SEC's sleight of hand. He stated that without a "common enterprise," it does not matter whether "the fortunes of investors" are tied to the efforts of others. Thus, the Howey test is not "so easily satisfied."

Pro-XRP lawyer Jeremy Hogan aligns with Alderoty's take on the SEC-Revak case. He noted that "the Revak case lays it out well, and based on the court record, XRP was not sold as a security at least since 2018."

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About the author

Tomiwabold is a cryptocurrency analyst and an experienced technical analyst. He pays close attention to cryptocurrency research, conducting comprehensive price analysis and exchanging predictions of estimated market trends. Tomiwabold earned his degree at the University of Lagos.