Eleanor Terrett, a Fox Business correspondent, has stated that if the judge rules that secondary market transactions of LBC by people unaffiliated with or without investment intent in LBRY are legal, it may set a precedent that is favorable to XRP users.
After this update, it appears as if the scales have shifted in favor of Ripple in the Ripple vs XRP lawsuit. There is a new update on this lawsuit and things are not looking good for the SEC.
Does Ripple have an advantage over the SEC?
Attorney John Deaton stated that US SEC lawyers and staff have been discussing the tokens as securities. While Bitcoin (BTC) was previously packaged, marketed, offered, and sold as an investment contract.
This, however, is referred to as Security. It is crucial to remember that just because someone used BTC as a security doesn’t mean that Bitcoin itself has become a security. According to the attorney, the logic remains the same in the XRP lawsuit.
The primary distinction between security and utility tokens is the purpose for which they are issued. If the coins were issued primarily to raise funds for something, they are security tokens. And it makes no difference whether tokens can be used to pay for goods and services on the platform.
Is the Judge likely to Rule in Favor of Ripple?
If the Judge believed that the token itself was a security, the statement would include subsequent sales of the token, according to the attorney. The Judge, however, stated that his decision does not apply to any subsequent sale of LBC tokens.
This turns out to be the most important reason why the Court’s clarification was desperately needed by crypto holders. However, a promoter’s direct sales of a token can still result in a commission. Meanwhile, in an investment contract case, the underlying asset is never the security.
The recent development, according to Amicus Curiae in the XRP lawsuit, gives him confidence that the Judge will deny the SEC’s Summary Judgment motion.
The Final Ruling is Near
For the longest time now, it appears like Ripple has had an upper hand in this lawsuit. The case is now in its concluding stage and its outcome would be very crucial for the entire crypto community. Ripple is working to make sure that, as of a certain date, or at least in the future, none of the XRP sales will be considered securities.
John Deaton, through his Twitter account, reported that SEC Commissioner Hester Peirce has acknowledged that her colleagues at the US Securities and Exchange Commission (SEC) were misleading with regard to the Howey Test for XRP.
Deaton claimed that the SEC’s evaluation of XRP did not consider each transaction individually, and stated that XRP satisfies the requirements of the “common enterprise” and “expectation of profits” components of the Howey test.
Peirce was cited as saying that the SEC’s analysis was insufficient, as it focused on the token itself instead of the conditions surrounding the token’s offering and sale, such as the contract, transaction or scheme.
The SEC holds the power to investigate any promoter who directly sells any commodity or asset, including tokens.
Additionally, in the case of investment contracts, the underlying asset is not considered a security, and the Howey test must be conducted before any offer or sale.
Impact of the XRP Lawsuit On The Crypto Industry
According to Deaton’s statement, John Deaton believes that Judge Torres will rule against the SEC’s request for summary judgment in the lawsuit involving Ripple XRP, as a result of the SEC’s dishonest evaluation of XRP’s Howey Test.
The ongoing legal battle between Ripple and the SEC has the potential to greatly impact the value of cryptocurrencies as a whole. The fluctuations in XRP’s value are widely monitored in the industry.
The crypto community is eagerly anticipating the outcome of the Ripple case, as it may have similar ramifications as the recent SEC lawsuit against blockchain-based sharing service LBRY. After the verdict in the LBRY case, LBC’s stock price saw a significant increase.
Morgan’s XRP Prediction
Lawyer and crypto industry expert Bill Morgan was asked about the potential for XRP to see a similar price increase if the SEC loses their lawsuit. At the time of writing, XRP had already experienced a 20% increase in value over the past 30 days, reaching $0.41.
The ongoing legal dispute between Ripple and the Securities and Exchange Commission is being closely watched by the cryptocurrency community. The future of Ripple and its XRP token is still up in the air following the filing of the respective summary briefings by the two parties.
The cryptocurrency community has been observing another nearly related case to predict what would happen to XRP before the summary decision. Possible resolutions in the Ripple case have been provided by the dispute between the SEC and the blockchain-based sharing platform LBRY in particular.
Interestingly, LBC’s value increased as a result of the most recent ruling. Bill Morgan, an attorney, and observer of the cryptocurrency market said that if the SEC loses the case, XRP could follow the same price trajectory.
In a series of tweets, Morgan also noted one finding from his assessment of Ripple’s response to the SEC’s Daubert challenge: the organization’s inconsistencies, or “typical change of position.” He provides examples and said that the first expert opinion on the viability of Ripple’s cross-border remittance product alleged that ODL was not a legitimate use case for XRP and questioned the company’s usage of the technology.
He wrote in one of the tweets, “The SEC argued that because despite other regulatory treatment it was not impossible (like any asset) for XRP to be sold as a security the expert evidence was irrelevant. Ripple’s response included pointing out that even the GAAP.”
Jeremy Hogan, a fellow legal expert, pondered what might happen to XRP at the same time in light of the fact that LBC’s value increased by about 100% in just one week despite the parent company’s lack of a complete victory in the litigation. Legal experts are still guessing on the likely verdict and its effect on the cryptocurrency market because the ruling is yet to be made.
For several months, the SEC has been under fire for its actions. It was unsuccessful in preventing the FTX from collapsing and saving investors millions of dollars. It has a long-running lawsuit against Ripple and a recently concluded lawsuit against LBRY.
U.S. Securities Exchange Commission (SEC) Chairman Gary Gensler has been criticized by Minnesota Senator Tom Emmer for his flawed “crypto information-gathering efforts,” and he has been instructed to testify before Congress to explain the cost of his “regulatory failures.” Emmer stated that “we now know Gensler’s crypto information-gathering efforts were ineffective,” citing the demise of the Terra ecosystem as well as the crypto platforms Celsius, Voyager, and FTX.
Is the SEC running without Congress’ authorization?
According to Eleanor Terrett, a Fox Business Journalist, the US SEC will face significant scrutiny from Congress in the coming months. According to the US Financial Services Committee, the commission has not been reauthorized since 2015.
During the Reauthorisation process, Congress is required to review and make changes to a government agency, according to orders. This is done to ensure that the agency is set up to run efficiently while still accomplishing its stated goal. Congress ensures that the agency receives adequate funding from the government to run its operations. The US SEC, on the other hand, is said to have received more than $2 billion in funding for fiscal year 2023. Meanwhile, the commission’s authority expired in 2015.
Gensler to testify
This means that Gary Gensler, the SEC’s chair, will have to fight the Financial Services Committee investigation. Gensler will have to demonstrate that the commission is operating properly and that the government funding is justified.
The latest action by the Financial Services Committee to reauthorize the commission is an early indication of the GOP’s plan to significantly rein in the agency. The committee will keep an eye on all aspects of the US Securities and Exchange Commission’s operations, activities, and other initiatives. This will be done to ensure that the agency is carrying out its mission of protecting investors.
The community is shocked that the SEC has taken such actions without being reauthorized. Some believe that the action taken against the SEC is well deserved. The SEC should reconsider its regulatory approach.
John E. Deaton, a cryptocurrency attorney, has disclosed that the attorneys representing the U.S. Securities and Exchange Commission (SEC) have been using tweets from both himself and LBRY in court hearings. The case between LBRY and the SEC is still ongoing.
However, according to Deaton, when the judge read the tweets, he chuckled and admonished the SEC’s attorneys for taking the tweets and statements too seriously.
The specific tweet, posted by LBRY, emphasized the need for businesses to conceal their actions from U.S. regulators, as the company had previously tried to be transparent with the SEC but with unfavorable results.
LBRY said that it stands by its statement, and that it hasn’t met a single fair actor in the SEC’s team, only “liars” and “psychopaths.”
In LBRY’s words:
“Hide absolutely everything you can from them (legally) and never cooperate or talk to the SEC.”
SEC At Fault?
According to Deaton’s remarks, Judge Barbadoro expressed empathy towards LBRY’s frustration in the case. He stated that there was no evidence of fraud or deceit and that LBRY conducted all its operations openly during a time when the SEC’s regulation of non-ICO matters was uncertain.
The judge recognized the significant effort and investment the defendants had put into LBRY but acknowledged that they had made a mistaken assumption. He rejected the notion of fair notice, and instead, emphasized that the SEC must take responsibility for its failure to provide clear guidance in the cryptocurrency industry.
The latest update in the infamous Ripple v. SEC lawsuit is that famed crypto attorney John E. Deaton helped Ripple achieve significant partial success in its battle against the SEC’s overreaching regulation through enforcement.
It has been formally acknowledged by the United States Securities and Exchange Commission that the sale of LBRY Credits (LBC) tokens on the secondary market does not constitute an instance of the sale of unregistered securities. The price of LBC stock increased by more than 80% very shortly after, and at one point, it even increased by more than 280%.
Expert Chimes In
Seeing the way LBC’s price reacted, it makes sense that XRP fans will anticipate the same for the token. Crypto enthusiast and lawyer Bill Morgan have predicted what he thinks XRP’s reaction will be if Ripple indeed emerges victorious in the rigorous case against SEC.
According to the lawyer, XRP could also see a massive spike if its issuer won. At the time of publication, the price of XRP was $0.4043, representing an increase of 1.11% over the previous twenty-four-hour period. XRP is now following the overall attitude in what is anticipated to be a risk-off move in front of today’s FOMC meeting.
Moving on, members of the crypto community will focus their attention on the judgments made by the court on the confidentiality of certain documents. It is important to keep in mind that the resolution of this lawsuit will not only have an effect on Ripple and XRP, but it will also serve as a model for how the cryptocurrency business should go in general. The Securities and Exchange Commission has filed a lawsuit against Ripple alleging that the company sold unregistered securities in the form of XRP coins.
Ripple Labs continued with its programmatic XRP monthly sales during the fourth quarter of 2022 despite the ongoing case against the SEC. According to the company’s 2022 Q4 report, they received 3 billion XRPs from the escrow account but returned 2.1 billion units to the escrow contracts.
As such, the company reported the total XRP sales, net of purchases, which were about $226.31 million compared to $310.68 million in the previous quarter.
Notably, the blockchain payment company is facing legal action from the SEC for selling billions of XRP to the secondary market to fund its projects. Perhaps the honorable thing Brad Garlinghouse would do is to return the XRP from the escrow account until the lawsuit is over.
Furthermore, programmatic sales have suppressed XRP prices for years despite the increase in global demand. Nonetheless, the company has made meaningful progress in developing the XRPL including enabling NFTs, and the stablecoin minting procedure.
Ripple (XRP) Market Outlook
During the fourth quarter of 2022, Ripple announced the expansion of the On-Demand Liquidity (ODL) to France, Sweden, and Africa. As such, the company’s crypto-enabled cross-border payments solution is available in nearly 40 payout markets.
At the end of last year, Ripple announced that Peersyst released the first phase of the Ethereum Virtual Machine (EVM) sidechain for the XRP Ledger (XRPL) on Devnet, which allows DeFi applications like Uniswap, Aave, and Compound to easily launch on the XRPL.
Forward, the company anticipates the United States lawmakers to focus on stablecoin regulations following the collapse of Terra Luna’s UST and FTX.
Notably, the company has significantly invested in the CBDC and stablecoins market with several clients at hand including the Royal Monetary Authority (RMA) of Bhutan and the Republic of Palau.
The SEC claimed LBC as a token in its latest hearing
This remarkable win against SEC will impact Ripple vs SEC lawsuit
The Ripple vs Securities and Exchange Commission (SEC) lawsuit is one of the long running cases. The lawsuit against XRP began in December 2020. Now, the crypto community is eagerly awaiting the results as the lawsuit is very close to the conclusion. To add on to this Ripple vs SEC case, John Deaton who is closely following the case had claimed that the hearing in the LBRY case will play an important role for the crypto market.
The lawsuit against LBRY by SEC had its last hearing on January 30, 2022 where the Judge concluded that LBC secondary market transactions are not security. Here, John Deaton, who is also a founder of Crypto Law played an important role during the hearing.
LBRY Case To Influence Ripple vs SEC Case
After referring to an article written by commercial contract lawyer Lewis Cohen, Deaton argued that as per the article there is no mention of LBC as a security. This gave rise to discussion in the court after which the judge stated that he cannot stop LBRY users to trade LBC as it’s not a security. This statement will now act in favor of other crypto-related cases like Ripple vs SEC.
John Deaton gained appreciation for his commendable action where SEC claimed that LBC is a token and not security. One such appreciation came from Hogan & Hogan law firm partner, attorney Jeremy Hogan and Eleanor Terrett, Journalist at Fox Business through a twitter post.
Hence, this win against the SEC is now expected to impact Ripple’s XRP lawsuit on a positive note. Currently, XRP is valued at $0.395 after a fall of 3.97% over the last 24hrs.
The U.S. Securities and Exchange Commission has an ongoing lawsuit against Ripple Labs, the company behind the cryptocurrency XRP (SEC). The SEC claims that Ripple Labs raised billions of dollars through an unregistered securities offering and that XRP is a security. The lawsuit is being fought in court by Ripple Labs, which has denied the accusations. The verdict in the case can have enormous repercussions for the crypto space.
The whole cryptocurrency sector has been heavily invested in the result of this litigation for some months. However, it’s intriguing to see that even banks are now paying close attention to this litigation.
IG Bank, a London-based company, wrote a piece about the Ripple v. SEC lawsuit late last week. The news is intriguing because it demonstrates that major financial players are still paying attention to the crypto business.
IG Bank’s Report
IG Bank is a Swiss-regulated financial company that provides professional clients with investment and trading services. It noted that an “SEC victory could severely limit the ability of crypto companies to grow.”
Furthermore, crypto companies like Ripple frequently introduce new coins in order to make income. The bank went into detail about the case, concluding that, “A positive outcome for Ripple could see XRP soar, but with the case in the air, this is far from guaranteed.”
How The Ripple Lawsuit Could Shape The Future
John Deaton, the founder of Crypto Law and a supporter of Ripple, recently tweeted an ominous warning that the sector would soon see the most aggressive attempt to shut down cryptocurrency.
This was said following a White House policy brief on minimizing the crypto risks. The statement read as follows.
“We have spent the past year identifying the risks of cryptocurrencies and acting to mitigate them using the authorities that the Executive Branch has.”
The future of regulation in the US is still very ambiguous. This remark and the SEC’s ongoing enforcement crackdown both send out unfavorable messages. On the bright side, the recently appointed chair of the House Financial Services Subcommittee on Digital Assets wants America to be the leader in fintech innovation.
This makes the Ripple case much more important. A successful outcome for Ripple will encourage fintech companies to operate in the United States. The opposite conclusion will almost certainly result in a mass exodus of crypto companies and talent.
The XRP price today is $0.400420 USD. The current market cap of $20,342,774,891 USD. The date of the final hearing is just around the corner.
With so much at stake, the Ripple vs SEC lawsuit has become a defining moment for the future of cryptocurrency regulation. The outcome of the case will have far-reaching consequences, not only for Ripple and XRP but for the entire crypto industry. As the date of the final hearing draws near, the crypto community waits with bated breath to see what the future holds.
The post Ripple Vs SEC: Deaton Says Judge Torres Could Deny Summary Judgment appeared first on Coinpedia Fintech News
According to John E. Deaton, a crypto lawyer, there is a possibility that Judge Analisa Torres in the Ripple-SEC lawsuit may declare a real dispute of material facts regarding the existence of a common operation in the case. Deaton noted that the SEC’s inconsistent position on what constitutes the common enterprise may contribute to this outcome.
He also highlighted the neglected possibility that Judge Torres may reject both requests for summary judgment and present the case to a jury.
Deaton stated that it is challenging to make predictions until they have an opportunity to review all relevant facts and evidence pertaining to Rule 56.
According to Deaton, the SEC argues that XRP satisfies the second and third prongs of the Howey test legally. However, it’s up to the SEC to provide evidence and proof, which it has failed to do for the second prong and for going transaction by transaction.
Deaton stated, “This is why I’m confident the SEC won’t be granted summary judgment as requested. I could see the judge denying it and letting the jury decide some issues.”
The outcome of the legal battle between Ripple and the SEC is still uncertain, but the stakes have never been higher. Both parties are seeking to protect their interests as a dispute arises over sealing some records in the lawsuit.
Grayscale Investments, a crypto asset management company, is preparing for a prolonged legal battle with the Securities and Exchange Commission over the creation of a spot bitcoin exchange-traded fund.
The SEC rejected Grayscale’s application to convert its flagship Grayscale Bitcoin Trust (GBTC.PK) (GBTC) into an ETF in June, claiming that the proposal did not adhere to guidelines intended to safeguard investors and prevent fraudulent conduct.
The SEC was accused of acting arbitrarily by Grayscale in denying applications for spot bitcoin ETFs while earlier approving applications for bitcoin futures ETFs. Grayscale filed suit against the SEC almost immediately after their proposal was rejected. The case is being handled by the District of Columbia Court of Appeals.
John Deaton’s take on the lawsuit
John Deaton, the founder of CryptoLaw has been very active in updating the community about the Ripple vs SEC lawsuit. He has also been updating about the tussle between Grayscale and SEC.
X3 founder Andrew in a recent tweet has updated in a recent tweet that there is a possibility that the Grayscale and Bitcoin case makes its way to the Supreme Court here in the US. The brief is in front of the DC Circuit and he believes that a win is possible.
In reply to this, Deaton has explained that a win is more than possible. He has mentioned that the odds of Grayscale winning before the DC Circuit is at 50/50 and before the Supreme Court is at 75-80%. Further, he has mentioned that the SECGov’s denial of a spot BTC, ETF while allowing both a futures ETF and a short ETF is arbitrary and capricious.
It appears that Deaton firms believe in Grayscale’s win against the SEC.
Further, in a follow-up tweet, Deaton explained that after the Supreme Court’s decision in West Virginia vs EPA, he has no doubt that the current makeup of the U.S. The Supreme Court will rule in favor of Ripple if it goes that far. The SEC did not limit its allegations to only apply to Ripple’s sales of XRP but went too far with it.
In this case, which concerned the EPA’s authority to control carbon emissions in order to combat climate change, the court’s decision prompted the United States Congress to prohibit the EPA from regulating emissions from plants.
As a result, there is a parallel to the SEC’s attempt to regulate the crypto area, and winning the case against Ripple is the first step toward establishing control of the nascent sector.
Famous crypto attorney and crypto advocate John Deaton continues to criticize the United States Securities and Exchange Commission (SEC) for the way it treats crypto and crypto businesses.
Deaton Wants to Testify
Deaton says he is willing to testify on the stand about all that he has learned surrounding the way Gary Gensler’s SEC handles anything concerning cryptocurrencies.
In addition, the crypto lawyer said that the SEC attorneys threatened to bankrupt American startup LBRY before launching a lawsuit against it, and then really did so after filing the case, despite the fact that the case did not include fraud or misrepresentation.
Last year, the SEC filed a lawsuit against LBRY for selling securities without first registering them. The Chief Executive Officer of LBRY, Jeremy Kauffman, said that the company had groveled in front of the SEC and volunteered to make any type of modifications. They provided an offer to make modifications concerning Ethereum and Bitcoin, both of which are designated as not being securities.
Kauffman told Deaton:
“I honestly don’t care about arguing the penalties. I mean, the SEC has won. LBRY is almost certainly dead. The SEC’s objective of bankrupting us through the process, which they threatened privately three years ago, they succeeded.”
In addition, during the hearing, Kauffman pleaded for clarity for the people who utilize the platform as well as transparency surrounding the transactions that take place on the secondary market. According to Deaton, an investigation into the situation is scheduled to take place on January 30.
Keep in mind that the SEC has already conceded on the record that many LBC token holders, if not the vast majority, did not see LBRY’s token as an investment and utilized the tokens for personal consumption rather than as a means to generate a financial gain.
The Securities and Exchange Commission (SEC) filed a lawsuit against LBRY on the grounds that the company violated Section 5 of the Securities Act of 1933 by marketing and selling unregistered securities.
LBRY asserted that their business did not have to comply with the requirements of the Securities Act since the purported security, the LBC token, was not in fact a security.
Rather, the company describes LBC as functioning as a kind of digital money and considers it to be an essential component of the network. The regulatory body ended up winning against LBRY in the lawsuit at the end of last year.
Deaton Explains Why LBRY Jan. 30 Hearing is Important
John Deaton, the creator of CryptoLaw and a well-known crypto enthusiast, believes that the LBRY hearing that will take place on January 30 is among the most significant events in the cryptocurrency industry.
Deaton brought up the fact that the SEC had admitted on the record that a significant number of LBC token holders, if not the majority of them, did not consider LBRY’s token to be an investment and that these token holders used the tokens for their own personal consumption purposes.
Nevertheless, despite pressure from LBRY CEO Jeremy Kauffman and the judge who issued the verdict, the SEC declined to offer clarification on LBC’s secondary trades, Deaton pointed out.
The Securities and Exchange Commission wants a permanent injunction that does not make any distinctions between LBRY, its officials, and users of the platform or transactions on secondary markets.
Deaton proceeded by stating that when the transcripts of the LBRY hearing are made available to the public, the request that LBRY CEO Jeremy Kauffman made to the court must be provided to each senator and congressman.
The U.S. Securities and Exchange Commission (SEC) denied Grayscale’s application to convert its Grayscale Bitcoin Trust (GBTC) vehicle to a spot Bitcoin, and Grayscale has now chosen to sue the SEC in court. “We’ve filed a lawsuit against the SEC,” stated SEC Chairman Michael Sonnenshein.
There has been a new development with respect to this issue. Let’s explore.
Grayscale v SEC Trial Preponed
A court order submitted on January 23 states that the court will hear arguments from both sides on March 7. Grayscale had anticipated that oral arguments would start in the second quarter. The action may have been prompted by Genesis Capital, a sibling company of Grayscale and a cryptocurrency lender, filing for Chapter 11 bankruptcy last week. Due to the FTX bankruptcy, Genesis halted withdrawals, redemptions, and the creation of new loans.
Since the bankruptcy of the cryptocurrency exchange FTX, Genesis has experienced significant withdrawals and significant liquidity problems. Genesis also has $175 million of its own locked on FTX due to its fall and insolvency. Genesis Global has suggested a roadmap to an exit through its Chapter 11 bankruptcy, which provides a framework for a global settlement and trust to distribute assets to its creditors.
Why is Genesis’s Bankruptcy to Be Blamed?
After Genesis’ bankruptcy, investors’ worries about GBTC’s widening discount rates have increased. The GBTC now has $14.5 billion in assets under management and a negative premium rate of 41.5%.
The Grayscale Bitcoin Trust’s management and sponsorship have been proposed to be taken up by Valkyrie Investments and Osprey Funds (GBTC). According to the companies, shareholders will have a better option for reduced management fees and a redemption scheme.
The community has reacted to this and has called it great. The fact that it is being preponed means that it is an urgent matter and cannot wait.
The SEC has been under fire from many people for its numerous lawsuits recently. Some have also claimed that it is concentrating on trivial matters instead of what is truly crucial.
About two years ago, the U.S. Securities and Exchange Commission (SEC) sued Ripple Labs, the company that created and manages the Ripple protocol, alleging that the company’s sale and distribution of XRP tokens constitute the sale of unregistered securities in violation of federal securities laws. The case is ongoing and a ruling is still awaited.
Both parties have filed numerous motions, and the matter has finally reached its conclusion, with the final ruling set to be delivered.
The community is both excited and anxious about the eventual decision. They are looking to LBRY v SEC to make a prediction and determine whether or not Ripple will win.
What’s the LBRY v SEC case all about?
The SEC sued LBRY for offering and selling unregistered securities in violation of Section 5 of the Securities Act of 1933. LBRY claimed that the company was exempt from the Securities Act since their alleged security, the LBC token, was not a security. Instead, according to LBRY, LBC worked as a type of digital currency that is an integral part of the LBRY Blockchain.
A hearing in the US district court for the LBRY v. SEC litigation will take place. The new hearing in LBRY Vs. SEC is anticipated to set a stage for Ripple and the defendants, according to John Deaton, Amicus Curiae in the XRP action.
The LBRY litigation has been compared to the XRP lawsuit in terms of regulatory clearance. The CEO of LBRY, Jeremy Kauffman, pleaded with the court and stated that the company has been at odds with the commission for long five years and has attempted to resolve the issue with the SEC as well.
He emphasized that the crypto sector is being built by a sea of intelligent individuals. However, the SEC does not specify the regulations, and by the end of this litigation, the market should have a better understanding of the rules and regulations.
How does XRP Escape the Security Category?
Bill Hinman’s claim that the digital asset itself is only code was cited by the XRP lawyer. It is marketed as a component of an investment to expand the business. Users of the LBC blockchain who didn’t buy tokens from the LBRY blockchain will win. Similar to this, a sizable number of XRP holders purchased XRP to participate in the XRPLedger. This demonstrates unequivocally that it is not a security.
If we go by this logic, the odds seem to be in favor of XRP in the lawsuit. In some time it will be clear when the court gives out its final ruling on this case.
Although XRP has a large number of advocates in its lawsuit against the United States Securities and Exchange Commission (SEC), there are some people who have taken the SEC’s side and are persuaded that XRP is a security.
People with these viewpoints have been vocalizing them in the Twitter comments section of crypto lawyer and XRP backer John E. Deaton, who has been an evangelist for Ripple from the very beginning.
What Deaton’s Question is
Therefore, Deaton has presented them with a perplexing question. The issue that needs to be answered is why, if XRP was so obviously security, the SEC did not require Ripple to cease selling it after SEC enforcement attorneys reviewed XRP in a document that was dated June 13, 2018.
They did not even recommend sending Ripple a cease and desist letter or pursuing legal action if the company did not stop offering illicit securities. The lawyer continued by asking why the SEC had allowed Ripple to take advantage of the public and dump on us if it was so evident and clear that they had done so. Why would they make it possible for Ripple to purchase 9% of MoneyGram and then provide XRP to MoneyGram, which MoneyGram would then sell to the general public?
Notably, the regulatory body filed a lawsuit against Ripple in 2020 for selling unregistered securities, which is XRP. This means that the litigation has been pending for more than two years at this point.
CEO Brad Garlinghouse of Ripple has said that the financial technology company is not going to reach a settlement with the SEC. The CEO believes that a verdict on the case will be issued before the end of the year.
Ripple is presently battling SEC on behalf of the entire industry, so let’s hope they emerge victorious.
Ripple Vs SEC: Judge Torres Holds the Key to Ripple’s Future: Deaton Claims “Outright Victory” in Court Battle
After years of litigation between Ripple (XRP) and the SEC, the judge’s closing ruling could be the final stage. There have been numerous theories and predictions made in relation to this lawsuit. The majority of individuals predict a settlement, while others anticipate a judge’s ruling.
If Ripple wins their lawsuit, it will help to strengthen XRP’s legality in the US market, which will enhance its price. It is also advantageous to the entire crypto sector since it provides clarity and confidence in cryptocurrency. The U.S. Commodity Futures Trading Commission (CFTC), the SEC, and any other financial compliance organizations must all be fully aware of their responsibilities and regulatory obligations.
However, if XRP loses, it could have serious consequences for XRP, its investors, and the cryptocurrency industry as a whole. The SEC would have the power to fine Ripple Labs and order the business to register XRP as a security.
The Community Speculates
A crypto enthusiast by the name @JayVTheGreat has claimed on Twitter that Ripple is most likely going to lose in its lawsuit against SEC. The user had doubts about how Ripple would conduct its transactions. Another reason cited is that Ripple has failed to make a compelling case for anything but the blue sky laws on whether an actual contract is needed or not. He went on to suggest that the Hinman emails are Ripple’s last hope because chairman Gary Gensler refuses to budge.
In response, John Deaton, a well-known blockchain attorney and the founder of CryptoLaws, intervened and brought smiles to the faces of the XRP community by outlining how Judge Analisa Torres might award Ripple an outright win. Deaton said in a thread on Twitter yesterday that he does not think Judge Torres agrees with the Blue Sky position, but he thinks Ripple might prevail in the SEC in the protracted legal dispute that has lasted for more than two years.
SEC Receives Backlash
The Securities and Exchange Commission was criticized by FOX Business senior correspondent Charles Gasparino for mishandling its regulatory agenda by prosecuting Ripple rather than the bankrupt crypto exchange FTX. The regulator charged Ripple, he continued, despite the fact that it is obvious that bitcoin exchanges are typically the source of major fraud.
Deaton continues to back Ripple while criticizing the SEC. For the longest period, he has been true to his prediction. He contends that during the three meetings they had, the SEC ought to have disclosed to Ripple officials that XRP is a security. The blockchain attorney thinks that as a result, the jury will have no trouble ruling against the SEC in this case.
In the ongoing Ripple-SEC case, all motions have been thoroughly briefed, and the judge’s judgment is expected, according to James K. Filan’s most recent updates. Ripple and the SEC submitted their final round of briefs in December, requesting the court to grant them summary judgment.
Omnibus applications to seal documents related to the summary judgment motions have also been filed by both parties as the motions for summary judgment and those to exclude expert witnesses have now both been completely briefed.
The CEO of Ripple, Brad Garlinghouse, expressed hope at Davos that the company’s legal dispute with the Securities and Exchange Commission will be resolved in 2023, perhaps as early as this year.
He said, “We are optimistic that this will definitely be fixed in 2023, and possibly the first half. So we’ll see how it plays out from here. But I feel very good about where we are with respect to the law and the facts.”
In his subsequent statement, he says that he expects a decision to be made “sometime in the following single-digit months” – maybe as early as June. The dispute over whether XRP should be considered a security will have significant effects on both Ripple and the greater crypto market.
Garlinghouse then added, “We’ve always said we’d love to oblige, but it requires one very important thing, and that is that looking forward, it is clear that XRP is not a security. The SEC and Gary Gensler have openly stated that they view almost all cryptocurrencies as a security. And so that leaves very little room in the Venn diagram for settling.”
Gary Gensler, the chairman of the Securities and Exchange Commission, previously stated his views on cryptocurrencies, particularly Bitcoin, in a CNBC interview with the host of Mad Money Jim Cramer. Gensler specifically contends that cryptocurrencies are a very speculative asset class. In fact, the SEC chairman was quick to point out this speculative asset class’ ups and downs.
The SEC filed a lawsuit against Ripple Labs Inc., the firm behind the XRP cryptocurrency, in December 2020, saying that the company engaged in an unregistered securities offering of XRP for $1.38 billion. The case is still ongoing, and the conclusion could have far-reaching consequences for the XRP cryptocurrency and the broader crypto sector.
Moreover, by the end of 2022, FTX collapsed and filed for bankruptcy. The FTX collapse was not the result of bad management or oversight, but of deliberate fraud. Another description of the alleged crimes is that they are “one of the biggest financial frauds in American history.”
Could the FTX collapse and people losing millions be prevented if the SEC had focused on the right people? Let’s see
Gasparino Criticizes SEC’s Judgment
Charles Gasparino is an American journalist, blogger, and radio host. On the Fox Business Network, he participates on panels frequently. In a recent tweet, he criticized the SEC’s judgment to go after crypto companies.
He has revealed how Sam Bankman-Fried, the founder of FTX, had two meetings with the SEC. He continues by saying that the SEC botched its regulatory strategy by going after Ripple over unregistered XRP when there were significant concerns about potential fraud with exchanges.
In response to this tweet, John E Deaton, the CryptoLaw founder has stated that it’s not just Ripple that has become a target of SEC’s poor regulatory agenda. The SEC sued LBRY, a small company in New Hampshire in another non-fraud case over the LBC token. Then there’s dragonchain whose DRGN token is governed by the Ethereum Blockchain and also with respect to Kim Kardashian. Pointing out the incompetence and failure of the SEC Chairman, Gary Gensler.
The SEC brought an enforcement action against LBRY in March 2021, claiming that LBRY had offered and sold LBC as an unregistered security in violation of Sections 5(a) and 5(c) of the Securities Act.
Further, The Securities Exchange Commission pursued charges against blockchain-company Dragonchain, alleging that the 2017 ICO and subsequent offers and sales of their DRGN token, which raised over $16.5 million in proceeds, were illegal sales of unregistered securities.
The Securities and Exchange Commission in October 2022, announced charges against Kim Kardashian for touting on social media a crypto asset security offered and sold by EthereumMax without disclosing the payment she received for the promotion.
Community Reaction to this
The majority of the community believes that if SEC had focused its attention on potential fraud by FTX and SBF, it could have prevented severe losses suffered by the FTX collapse.
The majority agrees with Charles Gasparino and John E Deaton and has expressed their disappointment with SEC and Gary Gensler.
XRP price has kept traders and investors on the verge of volatility as the trend creates confusion in the crypto space with concerns regarding the controversial central banks. Market experts believe that a sudden change in the monetary policy from the Bank of Japan and responses from European Central Bank (ECB) official Villeroy may develop a shockwave as the XRP token is not immune to it.
However, the lawsuit against the SEC may favor Ripple as US attorney John Deaton has criticized predictions on SEC’s victory.
XRP Price To Experience A Gradual Rise In Recovery Trend
Ripple’s high-profile war against the SEC has gained support from leading market influencers, including Coinbase and the crypto lobbyist group Blockchain Association. However, the native token XRP is trying to spark a downward retracement as the choppy price action seems to bring multiple hurdles in the price chart.
A prominent crypto analyst, Trading Surfers, predicts an exponential upward rally for the XRP token if it validates specific price points. According to the analyst, XRP has been waiting for one year for a bounce off the critical level of $0.34.
The analyst noted that XRP might initiate a slow increase on its Elliott path to $1.5 if it breaks above the $0.38 price zone. However, at a lower degree, XRP may again bring bearish woes with a downward journey to $0.18 if it crosses below the price range of $0.34-$0.38.
Will XRP’s Bulls Give Up Amid FUD Situation?
While the crypto market is still enjoying a bull run, XRP’s price brings fear among altcoin traders as the token struggles to hold its price near the 200-day simple moving average. However, the trend of XRP has not been much volatile compared to other altcoins in the market, but it hints at a 25% sideways movement.
According to CoinMarketCap, XRP currently trades at $0.3897, with a surge of over 2% in the last 24 hours. The Stochastic RSI has pulled itself down to a stable region near 72 as the RSI-14 drops to 61, signifying a continuous bullish trading session. Looking at the daily price chart, XRP has again built support at $0.37 after a rejection below the EMA-200 trendline.
XRP has room to spike if the current bearish sentiments regarding central banks fade away. If XRP continues to climb to its 23.6% Fib retracement and makes a breakout trade above $0.41, it can lure bulls to increase buying pressure and push itself to its Bollinger band’s upper limit of $0.45.
However, the above bullish analysis may get rejected if the support at 200-day SMA does not hold. A trade below the EMA-20 trend line may slump the XRP token to the bottom levels of the descending weekly RSI at $0.31.
Ripple Vs SEC Update : SEC Rejects Third Party’s Request To Redact Information, Atty. James Filan Reveals All!
Brad Garlinghouse, the CEO of cryptocurrency and blockchain business Ripple, believes that a resolution with the US Securities and Exchange Commission would be completed in the first half of 2023. He further added that he is optimistic about where they stand currently with respect to law and facts.
Everyone with an interest in the sector believes that the end is in sight and is closely monitoring all the updates. James K. Filan, a former federal prosecutor, keeps everyone updated.
SEC opposes certain redactions
In a recent tweet, James K Filan, a former federal prosecutor, revealed that the SEC has filed an opposition to Third Party A’s Motion to Redact all references to Third Party A as an entity, as well as Third Party A’s (and Ripple’s) proposed redactions to the names of certain public crypto trading platforms.
Although the identity of Third Party A has been made public in the dispute, the SEC observed that the company is still seeking redactions to 38 of the parties summary judgment filings. The SEC stated that it disagrees with Third Party A’s proposed redactions to the deposition transcript of its employee in 38 of the summary judgment papers.
What are the three categories that the SEC has opposed?
The SEC supports Third Party A’s request to omit the employee’s name and other identifying information, but it opposes three of the proposed redactions adamantly.
Firstly, the agency rejects Third Party A’s request to redact all mentions of the business as an entity. Second, the regulator opposes the redactions to the names of some public crypto asset trading platforms that Third Party A and the defendants propose.
Lastly, the Securities and Exchange Commission opposes the deletion of data from the deposition transcript related to the economics of Ripple’s On-Demand Liquidity (ODL) solution and Third Party A’s function in monetizing the XRP holdings of Defendants.
The SEC’s opposition comes less than five months after Third Party A requested that the court grant its move to modify one of Ripple’s attachments in its application for summary judgement.
What does the community think about this?
Twitter users believe that the SEC’s conduct is suspicious. What the SEC is hiding has been a recurring question. Another person stated that the SEC would ultimately run out of excuses since it always invents new ones. Some have even demanded that SEC Chairman Gary Gensler resign. There is a lot of hate towards the SEC for their statements.
It seems like the SEC wants to keep some of the information related to this lawsuit under the wraps. This seems like an attempt to influence the ruling of the case.
Popular blockchain lawyer and founder of crypto-laws.us, John E. Deaton, has made strong statements regarding the ongoing lawsuit between Ripple and the Securities and Exchange Commission (SEC) on the sale of XRP.
In response to a speech by Ripple CEO Brad Garlinghouse, who blamed the SEC for classifying Ethereum as a non-security and Ripple as a security, Deaton stated that the SEC will not be granted summary judgment on whether Ripple executives engaged in illegal XRP sales.
Deaton argues that the SEC should have informed Ripple executives that XRP is a security during the three meetings they had. As a result, the blockchain lawyer believes that the jury will have an easy time deciding against the SEC on this matter.
It is important to note that a summary judgment is a decision made by the court based on evidence and statements presented in the legal pleadings without a full trial. When challenged in the comment section that Ripple should have taken advice from its legal team on whether XRP is a security or not, Deaton argued that in that case, the SEC should not have met with crypto executives, including the founders of SBF and ETH.
“According to your logic, the SEC should never have meetings with w/companies at all. Why did the SEC meet 3X with SBFraud? Why did it meet ETH founders 4-6X in 5 months? Why did the SEC agree to meet 3 times w/Garlinghouse and Ripple? The point is that a jury would hear the evidence,” Deaton argued.
Previously, Deaton noted that the SEC lawsuit ought to have classified XRP as security or non-security before 2018.
Moreover, the SEC allowed publicly traded companies Coinbase Global and MoneyGram to sell XRP to investors. As such, Hinman ought to have classified XRP as a non-security together with ETH in his speech according to Deaton.
After the Consumer Price Index data indicated that inflation had dropped to 6.5% from 7.1%, the cryptocurrency markets almost immediately went bullish. XRP has been exhibiting persistent bullish movement as of late, which has sparked excitement among both enthusiasts and investors.
At the time of this writing, one token is worth $0.4, reflecting an increase of 1.6% over the course of the last 24 hours and 12% over the course of the past seven days.
XRP Aiming for the $1 Mark?
Because of the previously indicated constancy in XRP’s positive momentum, we are compelled to evaluate the probability that the coin may make an attempt to reach the $1 threshold.
Ripple, the company that issued XRP, is now in a high-profile legal battle with the United States Securities and Exchange Commission (SEC), and investors are hopeful that a verdict in favor of Ripple would have an immediate, massive bullish effect on the price of XRP.
In addition, whales are demonstrating a phenomenal interest in the token at the present time, as seen by the fact that they are continually purchasing hundreds of millions of it. The majority of TradingView’s technical analysis (TA) indicators on 1-day gauges point to a bullish outcome from a purely technical vantage point.
On the current market, XRP has a total market capitalization of $19.8 billion, which is an increase of approximately $2.7 billion over its market cap on January 1, which was $17.1 billion at the beginning of the year. And talking about market cap, the token is now the sixth biggest cryptocurrency.
Will Ripple Win Against SEC in Lawsuit?
If John E. Deaton, a defense attorney and prominent commenter on the issue, is correct in his prediction that the SEC will lose the case, then Ripple and XRP may have a good chance of winning.
The lawyer said that the SEC’s argument, which asserts that the XRP token has always been a security, is proof that applying the Howey test to Ripple Labs and XRP is tricky and complex.
According to Deaton’s research, all of this demonstrates that the SEC is wrong in its determination that XRP satisfies the second and third prongs of Howey, and hence that the SEC has very little chance of victory in this case. We don’t know whether Ripple will be able to pull off a victory over the SEC, but only time will tell.
The long-running Ripple vs SEC or the US Securities and Exchange Commission case finally seems to be coming to an end after the SEC filed for a summary judgment. The way the developments are shaping up points heavily toward a possible win for Ripple.
The latest development points that the SEC has now filed a motion against Ripple’s expert opinion. This is because the SEC believes that experts are unreliable and often suggest improper legal conclusions. Parallelly, even Ripple defendants have filed against SEC expert evidence.
Tussle Between SEC & CFTC
Meanwhile, Bloomberg’s yesterday’s article titled : Fight to Regulate Crypto at Crossroads as Ripple Ruling Looms has caught many industry expert’s attention. One such is Stuart Alderoty, Ripple’s general council. Alderoty is of the opinion that no matter who wins the Ripple vs SEC lawsuit, the result will affect the crypto market.
Furthermore, the crypto industry has always faced a question on who will and should regulate the cryptocurrencies. There is a tough tussle between two top industry players, Gary Gensler and Ripple’s Brad Garlinghouse suggested CFTC.
Here, if SEC wins as per Bloomberg’s claim the agency will have jurisdiction over major cryptocurrencies. On the other hand, if Ripple wins it might decrease SEC’s chance to claim the jurisdiction over crypto. Also most of the crypto experts are against SEC’s regulatory approach, as they believe the agency enforces instead of explaining the rules.
While the further decision on Ripple vs SEC is set to be made in the next six months, XRP is trying its best to move against the odds. At the time of publication, XRP is selling at $0.38 after a surge of 0.43% over the last 24hrs
As the Ripple v. SEC case continues to unfold, the crypto lawyer and XRP fan John Deaton have accused the Securities and Exchange Commission of abusing Howey’s test in its lawsuit against Ripple, the company that issues XRP.
An asset’s eligibility as an investment contract, and hence its subjectivity to federal security regulations, is established via the Howey test.
Deaton pointed out the fact that the regulating body asserts that XRP itself was, is, and always will be a security, but the SEC’s Howey argument has gotten so stretched out that it is genuinely indefinable, either in space or in time.
According to Deaton, this is not how a Howey analysis is conducted, and it most certainly does not render a token itself always a security regardless of the context in which it is used.
The attorney states that the SEC also contends that XRP itself embodies all of the promises, inducements, and attempts put in by Ripple from 2013 up to the current day. This indicates that the SEC’s position is that XRP itself fits the criteria of both the second and the third prongs of the Howey test.
Deaton continued by saying that those who are claiming that the SEC will undoubtedly prevail and that XRP is doomed are exaggerating the SEC’s prospects. According to him, the claims made by the SEC go beyond what is reasonable.
SEC Doesn’t Have Enough Evidence Against Ripple
Recall that the SEC asserts that Ripple was selling its XRP tokens without first registering the token with the relevant authorities and that the XRP tokens themselves are securities.
Meanwhile, the research conducted by asset manager CoinShares that a significant number of investors are convinced that the SEC does not possess any legitimate evidence to substantiate its assertions.
As Deaton also predicted, the two-year legal fight between Ripple and the SEC wouldn’t end until Judge Analisa Torres made a judgment in 2023. The crypto lawyer also took issue with Gensler’s claim that ETH tokens on the Ethereum network may be classified as security contracts if the Howey test were applied.
The XRP price has been trapped in a falling trendline since mid-April 2021. However, it is the descending triangle formed since the beginning of May 2022 that has given most XRP traders sleepless nights. Moreover, downward breakouts are more likely to occur in a descending triangle when the price is in a falling trend line, although an upward surge can occur in the crypto market.
The Ripple-backed crypto asset has gained approximately 12 percent in the past seven days to trade around $0.387976 on Monday. Down 88 percent since hitting its ATH, $3.4, the next major move on XRP price is heavily reliant on Judge Torres’ decision.
If the Judge on SEC vs Ripple case deems XRP security under the Howey test, then a capitulation could quickly follow forth. However, a Ripple win could send the XRP price to new highs and offer anticipated relief to DeFi projects on other chains like Ethereum.
The XRP market with approximately $38,768,969,611 in fully diluted valuation remains under the watchlist of hundreds of thousands of global crypto traders. Moreover, the XRP market reported a 24-hour trading volume of about $1,471,068,787.
The XRP traders will closely monitor how the asset’s price behaves on approaching both trend lines. After rebounding from the falling trend like several times in the past, and also respecting the $0.31 support level, a breakout from these two will be enormous. However, XRP traders should be wary of stop hunts that lead to a price reversal. Furthermore, XRP is well known to lead in crypto liquidation with over $3 million rekt in the past 24 hours according to data provided by Coinglass.
The Securities and Exchange Commission (SEC) has requested that the court exclude the expert opinions of Professor Alan Schwartz, Peter Adriaens, Allen Ferrell, Borden, Easton, Yadav, Fischel, Marais, Shampanier, and Carol Osler in a case involving the cryptocurrency XRP. The SEC argues that these experts’ opinions are not relevant to the Howey test, which is used to determine whether an asset constitutes an “investment contract.”
In a statement, the SEC said, “Defendants and their experts ignore Howey and controlling precedent, and instead ask the court to decide the question of whether defendants offered and sold XRP as part of investment contracts by looking to other legal regimes or to facts that courts have repeatedly held are irrelevant to the Howey analysis.”
The SEC stated that the important factor to consider in determining whether something is an investment contract is not whether it has any uses, but whether the asset was primarily sold for its potential for profit rather than for its use.
This request for the exclusion of expert opinions is the latest development in the ongoing legal case between the SEC and Ripple. The SEC has accused Ripple of conducting an unregistered security offering by selling XRP, which the company has denied. The outcome of this case could have major implications for the cryptocurrency industry as a whole.
The U.S. Securities and Exchange Commission (SEC) filed a lawsuit on January 12th against digital asset management group Genesis and the cryptocurrency exchange Gemini, founded by the Winklevoss twins, for alleged violation of securities laws by selling unregistered securities.
However, a surprising revelation came to light when former SEC Enforcement Chief, Lisa Braganza, alleged that the regulatory agency had prior knowledge of the situation but chose to allow it to continue. This has raised questions about the SEC’s handling of the case and their enforcement actions towards the crypto industry.
Why did the SEC fail to act?
Lisa Braganza, a former branch chief of the SEC’s enforcement division in Chicago, revealed in an interview on CNBC’s Squawk Box that the regulatory agency had been investigating Gemini’s crypto-lending product for an extended period but failed to take action.
She claims that the SEC allowed the potentially fraudulent operation to continue, even after the crypto market crash in November 2022 and Gemini’s failure to pay customers. According to her, it took “two more months” for the SEC to take action, as it was waiting for Gemini to file an answer in a separate class action case related to the company’s failure to continue payments under its proprietary Earn product.
The SEC had previously made it clear that programs like Earn are considered securities, making it baffling that they didn’t resolve the issue sooner. She said, “It’s puzzling why they didn’t come to a resolution of this a long time ago, months and months ago.”
Braganza believes that there has been a lot of finger-pointing, starting with Barry Silbert, CEO of Genesis’s parent company Digital Currency Group (DCG), and also involving the Winklevoss twins who, according to her, failed to conduct their own research and relied solely on Silbert’s assurance of Genesis’s solvency. Additionally, she states that the regulatory authorities have been aware since June 2022 that the leading cryptocurrency broker Genesis was operating in a non-solvent manner in the United States.
According to Braganza, digital asset management groups and crypto exchange companies have a responsibility to their customers when handling large sums of money, particularly their customers’ money. The SEC has not yet commented on her statements. The outcome of the legal action taken against Genesis and Gemini is yet to be determined, as the case is still in progress.
The US Securities and Exchange Commission charged Genesis Global Capital and cryptocurrency exchange Gemini Trust Co. on Thursday with offering and selling unregistered securities to retail investors without making the required disclosures or complying with other market participant protection measures.
SEC chair Gary Gensler said in a statement :
“Today’s charges build on previous actions to make clear to the marketplace and the investing public that crypto lending platforms and other intermediaries need to comply with our time-tested securities laws. Doing so best protects investors. It promotes trust in markets. It’s not optional. It’s the law.”
The SEC is also looking into if there were any more violations of the securities laws, as well as whether there are any other businesses or individuals connected to the whole issue.
Gemini was started by twins Tyler and Cameron Winklevoss. Investors sued the cryptocurrency exchange in late 2017 on the grounds that the company had issued interest-bearing accounts through the Gemini Earn programme without properly registering them as securities.
On Twitter, Tyler Winklevoss voiced his disappointment with the SEC’s lawsuit against Gemini. Winklevoss noted that the Gemini Earn programme is completely governed by the New York State Department of Financial Services.
He also disclosed that despite having discussed the programme with the SEC for more than 17 months, the agency had never raised the issue of additional regulatory action until Genesis suspended withdrawals due to liquidity issues.
“We look forward to defending ourselves against this manufactured parking ticket. And we will make sure this doesn’t distract us from the important recovery work we are doing. But seriously, what is the point or urgency here? The Earn program has been shut down for almost two months.”
John Deaton, a well-known cryptocurrency lawyer, has turned to Twitter to provide his forecasts for the year 2023.
Deaton’s Predictions for Ripple-SEC Case
Among Deaton’s predictions, the first one is that a settlement to the Ripple case will not be reached until after we hear from Judge Torres. In the case that Ripple is being sued over, the attorney has also presented an argument that is in opposition to the SEC’s assertion.
The regulatory body claims that the firm is dependent on XRP sales to finance its operations and capital expenditures, which is evidence that Ripple and XRP are both belonging to the same enterprise and that the cryptocurrency is a security.
This assertion is further supported by the fact that Ripple allegedly gave cryptocurrency exchanges financial incentives in return for listing XRP. Both pieces of evidence, according to Deaton, are the SEC’s most compelling pieces of evidence; yet, all of this has left him wondering what exactly constitutes a common operation.
Deaton argues that in order for a court to accept the claim that Ripple planned to sell XRP and establish a secondary market, they would have to conclude that the whole XRP ecosystem, such as the exchanges and all of the holders, is a joint company.
Deaton’s Other Predictions
If Ripple’s SEC complaint is dismissed and XRP is classified as a security, the SEC may decide to launch an enforcement initiative to control the cryptocurrency. The XRP community anticipates a favorable ruling from Judge Torres.
Deaton further claims that the SEC will suit more than one exchange for selling securities without proper registration. The sued exchanges are called Gemini and Genesis.
Deaton then goes on to suggest that he believes inquiries into the interactions between disgraced crypto public figure Sam Bankman Fried and will reveal a lot of shady goings-on.
The attorney concludes that Gary Gensler will leave before the year is up. I find these predictions interesting, and I look forward to seeing which ones come true.