For years Ripple occupied the number three spot in the cryptocurrency market, right behind Bitcoin and Ethereum. The company had built relationships with major banks and amassed an army of devoted followers. Now, the SEC threatened to unravel those achievements with some uncomfortable questions.
Deaton believes this to be the case since the SEC’s primary objective is to increase its hold on the rising market. As a result, he went to great lengths on the Howey test and how it is used by the SEC. In a tweet published today, Deaton explained the SEC’s reasoning for a summary judgment against Ripple. According to him, the defendants do not contest that they offered and sold XRP in return for money,’ which is sufficient evidence to prove the investment of money part of the Howey test.
Stating that “Ripple’s summary judgment brief is already an extremely well-written appellate brief,” Deaton also argued that the “West Virginia v. EPA case is all you need to read to agree with me.” In the case to which Deaton was referring, the Supreme Court had ruled that the Environmental Protection Agency (EPA) had exceeded its authority in regulating emissions from existing power plants, the regulation which was earlier questioned by multiple states and coal industry companies.
Furthermore, the legal expert quoted Ripple’s general counsel Stuart Alderoty who said that the regulator had lost four out of five of its last cases in the Supreme Court due to the “few that had the courage and resources to fight back against the SEC’s bullying and clinging to stretch legal positions that were not faithful to the law,” in a tweet from February 20.
Responding to a comment under his tweet, Deaton also said the XRP community was lucky to get Judge Analisa Torres presiding over the lawsuit, and that he expected her to deny the SEC’s summary judgment motion and send the case to a jury, which, in his view, would equal a win for Ripple. As a reminder, Deaton had previously slammed the agency over its “stupidly outrageous” assertions that “a person who acquires XRP in Japan is in a common enterprise with Ripple ‘and all other XRP holders’ and XRP is a security – even though Japan’s own regulator says it’s not,”
It is also important to note that the future price of XRP would likely be heavily influenced by the final outcome of Ripple’s legal battle against the SEC, with the blockchain company’s potential triumph helping to solidify XRP’s legality in the U.S. market and opening up the crypto sector to more mainstream investors and businesses.