With its accusations against Ripple, the US Securities and Exchange Commission (SEC) does not appear to have enough cards to prevail in court. At least that is the viewpoint of attorney Jeremy Hogan, who has been watching the trial closely and frequently shares his thoughts on how the proceedings are developing.
Since two years ago, the supervisory authority has been making an effort to show that XRP qualifies as a security. The so-called Howey test is used to assess whether an asset is a security.
The SEC claims that XRP buyers purchased the token in order to directly profit from Ripple’s trading activities, similar to how stockholders do. The authorities hired a specialist to provide evidence that the XRP exchanges on the secondary market were investment contracts.
The expert, however, testified to the court that he did not inquire of any of the XRP customers as to why he purchased XRP. Deaton argues that since there is a clear exclusion standard for the court, expertise shouldn’t be considered when making a decision.
However, as Deaton noted, Ripple was able to show that the purchasers of XRP were not considering Ripple’s own commercial endeavors:
“Ripple has provided clear cut evidence that a normal buyer of XRP would not rely on Ripple to positively influence the price. favor of the SEC. I’m not saying the SEC can’t win – but not based on that reasoning.”
Ripple has submitted direct, hard evidence that a reasonable XRP purchaser was not relying on Ripple to increase price.
I don't see how the Judge ignores that evidence and grants summary judgment on this prong of the test.
Not saying the SEC can't win – but it can't win here. pic.twitter.com/LjrTfYWw4m
— Jeremy Hogan (@attorneyjeremy1) November 6, 2022