The post Ripple vs. SEC Lawsuit Update: Top Crypto Lawyer Says SEC’s Appeal Shows Agency is Unstable appeared first on Coinpedia Fintech News
Recent industry developments have thrust the SEC into the spotlight, stirring waves of criticism from key industry players. Among the most vocal critics is John Deaton, a renowned lawyer specializing in the world of cryptocurrency. Deaton has challenged the Securities and Exchange Commission’s (SEC) grasp of its foundational responsibilities and has drawn attention to potential discrepancies in testimonies given under oath by its officials.
SEC’s Mission: Lost in Translation?
The cryptocurrency landscape is ever-evolving, but the SEC’s response has sparked doubts regarding its clarity of purpose. Critics like Deaton argue that the SEC appears to be veering from its established mission. Instances related to digital assets, particularly the Ripple XRP case, exemplify this perceived drift.
A striking point of contention revolves around former SEC official Bill Hinman’s sworn testimony. Hinman had posited that not all Howey factors – criteria that determine if an asset is a security – need to be satisfied for an offer or sale to classify as an investment contract. According to Deaton, such a stance indicates one of two possibilities: either Hinman lacked the proficiency required for his role as Director of Corporation Finance or his statements were misleading and deceptive.
Howey’s Test and the Ripple XRP Saga
The Howey Test, a cornerstone in securities legislation, determines if a particular arrangement qualifies as an investment contract. Its criteria stipulate that any scheme involving monetary investment in a shared business, where profits arise primarily from the efforts of others, is considered an investment contract. The nature of the enterprise, whether it’s speculative or not, or the intrinsic value of the property being sold, is deemed irrelevant.
It’s essential to note that within the context of the SEC’s legal battle against Ripple XRP, the cryptocurrency was ruled not to be a security by Judge Torres. Yet, in a surprising move, the SEC has decided to challenge this ruling.
The ripple effect (no pun intended) of these developments has left many in the crypto community wondering about the stability and direction of the SEC.
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