The continuing legal dispute between Ripple Labs and the U.S. has taken a long and dramatic turn. Securities and Exchange Commission: Recently released SEC employee emails have sparked rumors about claims the regulatory body has made about the cryptocurrency XRP from Ripple.
John Deaton, an attorney who represents XRP holders, has drawn attention to a footnote in Ripple’s court filings. He allegedly said that XRP might not pass the Howey Test and shouldn’t be regarded as a security. Concerns concerning the SEC’s actions and their consistency with their own staff’s analysis are claimed to have been raised as a result of the aforementioned discovery.
Additionally, the court’s decision to deny the SEC’s request to have papers relating to the Hinman Speech sealed has increased the already high level of interest in the cryptocurrency sector because these memoranda may reveal information about why Ether (ETH) was not regarded to be a security.
Doubts Around XRP’s Security Status Raises
A key footnote in Ripple’s opposition as well as in the reply papers filed with the U.S., according to attorney John Deaton’s involvement in the Ripple action. The Southern District of New York’s district court.
The Howey Test, which is used to examine whether an asset qualifies as a security under federal securities legislation, has been described in which reports have shown that the stated footnote has asserted that there are reasonable grounds to assume that XRP does not meet all of its requirements.
Furthermore, it appears that this development calls into question the SEC’s claim that XRP is a security. The aforementioned development also makes one wonder why the agency went after Ripple executives when its own experts had determined that the token did not meet the requirements for security.
The aforementioned lawyer went on to point out that exhibit number 230 from SEC correspondence shows that it is “more likely than not” that XRP won’t be regarded as a security. Hence, the SEC’s regulatory monitoring should not apply. The relevant exhibit, which is a portion of the SEC correspondence, refutes the accusations made against Ripple.
Deaton added that the SEC’s enforcement attorneys had examined XRP in June 2018. They did not then advise taking any enforcement action, such as stopping XRP trading with a cease and desist letter, as an example. This new information prompted important inquiries regarding the SEC’s decision-making procedure and the consistency of its actions in relation to XRP.