As the conclusion of the widely-publicized lawsuit between the United States Securities and Exchange Commission (SEC) and Ripple Labs looks to be drawing near, one particular leading legal expert had a few things to add in favor of the blockchain company.
Specifically, defense lawyer and popular commentator on the case, John E. Deaton, said that the SEC was overstretching its arguments, drawing attention to the Howey analysis the regulator used to assert that the XRP token was a security, as he explained in a Twitter thread on January 16.
He specified that the SEC’s argument, in which it claims that the XRP token is a security at all times, was in itself evidence that the use of the Howey test in the case of Ripple Labs and XRP was problematic and a difficult thing to carry out.
Deaton highlighted the 3,000 affidavits showing the first-time XRP buyers weren’t aware of Ripple, that they purchased it for non-investment reasons, receiving benefits from XRP completely independent of Ripple, and the fact that the SEC’s expert witness backtracked on arguing Ripple was a common enterprise.
As he stressed:
“If you carefully read the SEC’s brief, it claims XRP is the common enterprise itself. It actually says it. But guess what? The SEC ALSO claims that XRP itself represents all the promises and inducements and efforts made by Ripple since 2013 until the present.”
SEC’s chances are slim?
In Deaton’s view, all of this proves that the SEC is in the wrong that XRP satisfied both the second and third prongs of Howey and that its chances at winning the case are slim. On top of that, the attorney posted a section of his submitted argument and said that, in his view:
“That’s not how a Howey analysis works, and it certainly doesn’t make a token itself always a security no matter the circumstances. People predicting the SEC will definitely win and that XRP is doomed are overstating the SEC’s chances. The SEC’s allegations are stretched too far.”
XRP price analysis
Meanwhile, the price of the token involved in this lawsuit has been recording gains in line with the general cryptocurrency market sentiment, seeing it grow 10.97% across the week, adding up to the cumulative growth of 10.03% over the month, at press time standing at $0.3876.
At the same time, XRP’s market cap stands at $19.66 billion, as the token holds the position of the sixth-largest cryptocurrency by this indicator, according to the data retrieved by Finbold from the crypto tracking platform CoinMarketCap on January 17.
Indeed, a positive ruling in the lawsuit against the financial regulator could have a tremendous bullish effect on the price of XRP in the short-term. Given Deaton’s optimism that the SEC will lose the case, the odds could indeed be in the favor of Ripple and XRP.
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