While the end of the prolonged XRP lawsuit case with the United States (US) Securities Exchange and Commission (SEC) is still very much uncertain, on April 9, a partner at the law firm of Hogan & Hogan and a lawyer took to his Twitter with a series of tweets to oppose the SEC claims on Ripple.
Initiating a lawsuit, this claim on the Ripple company which owns XRP involved that the company has been selling the XRP tokens as “unregulated security.” However, according to the lawyer Jeremy Hogan, XRP is nothing close to “security.”2
Why XRP Is Not A Security?
With the XRP lawsuit case still ongoing, Hogan was eager to present his opinion backed up with references and details linked to code sections.
Opposing the SEC lawsuit against Ripple, Hogan stated “XRP is not a security” and this is because, “under the legislative definition of a security,” XRP can only be considered a security if it fits under the definition of an investment contract.”
However, since it doesn’t fall into categories of other securities-related such as a stock or bond, the asset can not be viewed as a security. Hogan further noted that even the US SEC has “failed to argue that there was an implied or explicit contract of investment in its lawsuit against the Ripple company.
The lawyer stated:
Instead, it argues that the purchase agreement is all that is required – and that is all it proves. But that argument tears the ‘investment’ from the ‘contract’ as a simple purchase, without more, cannot be an ‘investment contract,’ it is just an investment (like buying an ounce of gold) as there is no obligation for Ripple to do anything except transfer the asset.
Hogan further reflected on the Howey test – a US Supreme Court case for determining whether a transaction qualifies as an investment contract – which the Ripple company has since gone under amid denying the SEC claim that it offers an investment contract.
Hogan said the “blue sky” cases, which the Howey case depends on to define the “investment contract, all had a “contract” regarding the “investment.” At the end of the note, the lawyer mentioned that the “issue is NOT whether Ripple used money from the sale of XRP to fund its business.”
However, the issue is more of whether the SEC has proven that there was either an implied or explicit contract between Ripple and XRP purchasers relating to their “investment.” Meanwhile, “there was no such contract.”
Related Reading: Relist XRP On Coinbase Trends Again, Here’s Why
XRP’s Price Action Amid Ongoing Lawsuit Case
Regardless of the ongoing lawsuit with the SEC, XRP has tapped into a 10-month high amid the saga, up by more than 30% in the last 30 days. However, since reaching a price tag as high as $0.57, XRP has seen a retracement, and it’s currently down nearly 4% in the past week with a trading price of $0.50, at the time of writing.
XRP’s market capitalization has mirrored its price action. Its market cap which was seen ranging at $18 billion as of March 11 before surging to a high of $29 billion on March 30 has now also plummeted and currently sitting at a value of $26 billion.
Featured image from iStock, Chart from TradingView