XRP Lawsuit: Ripple’s Legal Officer Cites 77-year-old Case To Disprove SEC’s Claims• May 14, 2023 11:34 am • Comments
The lawsuit between Ripple and the SEC continues to drag on as both sides continue to debate on whether or not XRP is considered a security.
Stuart Alderoty, the chief legal officer of Ripple, recently shared on Twitter on how the SEC’s claims do not hold up in court based the results of past cases.
Specifically, Alderoty referred to the Supreme Court’s “Howey” case of 1946 where the Supreme Court rejected the SEC’s argument that an investment in a “common enterprise” was not necessary if there was a community of interest.
If the SEC was wrong in that case, then by extension, the SEC should also be wrong its current argument against Ripple.
It is clear that this case would definitely brought up again if the lawsuit ever gets escalated to the Supreme Court again.
In 1946, in its Sup Ct “Howey” brief, the SEC unsuccessfully argued that an investment in a “common enterprise” was unnecessary provided there was a “community of interest”. The SEC was wrong then and it is still wrong now. Common Interest ≠ Common Enterprise. pic.twitter.com/RvH50b6Yjv
— Stuart Alderoty (@s_alderoty) May 13, 2023
In the case, the SEC argued that investment in a “common enterprise” was not necessary if there was a “community of interest,” which was rejected by the Supreme Court. Consequently, Alderoty pointed out that the SEC was wrong back then and also now concerning XRP.
The legal officer argued that common interest is not similar to common enterprise and that the SEC is wrong to claim that all XRP holders are involved in a common enterprise.
Alderoty has accused the regulator of attempting to misinterpret the Howey test. Notably, the disagreement focuses on the “common enterprise” aspect of the test, with Ripple’s lawyers claiming that the SEC is stretching the definition beyond its original intent.
As the legal battle enters its third year, the regulator has argued that the fungibility of XRP serves as evidence of a common enterprise. The SEC contends that all units of XRP are interchangeable and that their value fluctuates together, forming part of a common enterprise.
It is essential for the courts to uphold the decisions of past cases in order to maintain consistency in their rulings.
As a result, this puts Ripple in a significant advantage over the SEC as all past cases are pointing towards the fact that XRP is not considered a security.
This is not the first time that the “Howey” case has been brought up as the case has been debated on many times throughout the lawsuit.
It is still expected that summary judgement will happen soon and that the date of the judgement will be announced sometime this year.
After all, the case is already at the 2 year mark which is quite uncommon compared to all other cases.
"This isn’t a crypto problem, this is a “We The People” problem."
– Stuart Alderoty, Chief Legal Officer @Ripple $XRP #fintech https://t.co/fwyX8f31ne pic.twitter.com/Ns5WyVL5el
— XRP_Cro 🛸 (@stedas) May 13, 2023
As the “Howey” case remains a source of contention among both parties, the crypto community is anticipating the summary judgment date for the ongoing legal dispute.
To recap, the SEC has accused Ripple of selling unregistered securities in the form of XRP tokens. Speculations abound that the matter may be resolved in the year’s first half.
Several potential outcomes have been suggested, but Ripple has secured a few minor victories throughout the proceedings.
Meanwhile, Ripple CEO Brad Garlinghouse appeared at the XRP Las Vegas 2023 event, expressing his gratitude towards the XRP community for their unwavering support during the legal battle.
At present, XRP, which remains at the heart of the dispute, is trading at $0.43 with a loss of less than 0.5% over the past 24 hours.
The Revak case exposes yet another SEC sleight of hand. Without a “common enterprise” it matters not whether “the fortunes of investors” are tied to the efforts of others. The Howey test is not “so easily satisfied.” https://t.co/1BFcnxHAMM pic.twitter.com/kDSSh2EC7O
— Stuart Alderoty (@s_alderoty) May 14, 2023
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