As the Ripple v. SEC continues to play out, crypto lawyer and XRP fan John Deaton has accused the Securities and Exchange Commission of abusing the Howey test in his lawsuit against Ripple, the company that issues XRP.
The eligibility of an asset as an investment contract, and therefore its subjectivity to federal security standards, is established through the Howey test.
Deaton pointed to the fact that the regulator claims that XRP itself was, is, and always will be a security, but the SEC’s Howey argument has been so stretched out that it is genuinely indefinable, whether in space or time. .
According to Deaton, this is not how a Howey analysis is conducted, and it certainly does not convert a token itself into a security, regardless of the context in which it is used.
The lawyer claims that the SEC also maintains that XRP itself represents all promises, incentives and attempts made by Ripple from 2013 to the present day. This indicates that the SEC’s position is that XRP itself fits the criteria of both the second and third points of the Howey test.
Deaton went on to say that those who claim that the SEC will undoubtedly prevail and that XRP is doomed are exaggerating the SEC’s prospects. According to him, the SEC’s claims go beyond what is reasonable.
The SEC does not have enough evidence against Ripple
Remember that the SEC claims that Ripple was selling its XRP tokens without first registering the token with the relevant authorities and that XRP tokens themselves are securities.
Meanwhile, research by asset manager CoinShares shows that a significant number of investors are convinced that the SEC does not possess any legitimate evidence to substantiate its claims.
As Deaton also predicted, the two-year legal fight between Ripple and the SEC would not end until Judge Analisa Torres issued a ruling in 2023. The crypto lawyer also took issue with Gensler’s claim that ETH tokens on the Ethereum network they can be classified as securities contracts if the Howey test were applied.
This post Ripple Vs SEC: John Deaton Calls Out SEC For Misuse Of Howey Test
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