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U.S. Attorney John Deaton has explained in-depth why the XRP cryptocurrency cannot be classified as a security even if blockchain payments company Ripple sold it to the public as an investment contract.
"XRP continues to be a numeric code": John Deaton.
The discussion on whether the XRP should be considered a security crisis, which is at the heart of the legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC).
In a comprehensive Twitter feed on Friday, Cryptolaw founder john e deaton claimed that xrp "remains a numerical code" even if the undulation sold as a contract of investment (read: title) in the past or still sells it today.
Deaton noted that just because someone has used Bitcoin (BTC) as a security, he has not transformed it into a security. Likewise, in the case of lbry credits (lbc), the judge held that lbry sold lbc as an investment contract in direct sales. According to the lawyer, lbc is still a software code and nothing more. The second even officially admitted that selling LBC tokens on the secondary market was not a security. This means that lbc itself cannot be considered as an asset. Should that be the case, the court's decision would apply to all of its sales.
The same applies to the X-rays of the undulations. However, Deaton points out that the Commission has already suggested that the XRP token itself is a safety. 'This new and dangerous theory of incarnation is the manner in which the latter tries to extend its field of competence in secondary market transactions. The theory pushes Howey beyond any recognition."
Still, the underlying asset is never the security in an investment contract case, and the novel Howey test requires a Howey analysis at the time of each offer or sale. That is why Deaton is completely confident that the district judge analisa torres will dismiss the Sec's motion for summary judgment in the prosecution of XRP.
Bitcoin was Once Sold As A Security
Deaton also cited the crypto market lodestar, bitcoin, as he explored the XRP security issue. It finds that the digital asset has already been "packaged, marketed, offered and sold" as an investment agreement. These include condos, chinchillas and beavers. Even though they may be sold in the form of investment agreements, this does not mean that they are transformed into transferable securities.
The SEC took action against Ripple in December 2020, contending that it had sold an unregistered security since 2013. After two years, the reputation of the case was tarnished. A decision should be issued in the first half of 2023, subject to an improbable resolution. Most loyalists believe that the ripple has the upper hand, and they are convinced that society will prevail in the end.
That being said, the regulatory clarity the crypto industry has long clamoured for is most likely to come in the form of a decision in the SEC v. Ripple lawsuit.
