{"id":76924,"date":"2023-04-10T12:00:37","date_gmt":"2023-04-10T09:00:37","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=76924"},"modified":"2025-09-10T20:16:45","modified_gmt":"2025-09-10T17:16:45","slug":"lawyer-says-secs-arguments-in-ripple-case-are-weak","status":"publish","type":"post","link":"https:\/\/u1f987.com\/en\/lawyer-says-secs-arguments-in-ripple-case-are-weak\/","title":{"rendered":"Lawyer says SEC&#8217;s arguments in Ripple case are weak"},"content":{"rendered":"<p>Ripple&#8217;s XRP token is not a security and only &#8220;possibly fits the definition of an investment contract,&#8221; according to lawyer Jeremy Hogan.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">The #1 reason why XRP is not a Security (a thread).<\/p>\n<p>First, under the legislative definition of a security, XRP can only POSSIBLY fit under the definition of an \u00abinvestment contract.\u00bb It is not a stock or bond, etc..<\/p>\n<p>Even the SEC concedes this: \u00abinvestment contract.\u00bb <a href=\"https:\/\/t.co\/n9g7ZEos2n\">pic.twitter.com\/n9g7ZEos2n<\/a><\/p>\n<p>\u2014 Jeremy Hogan (@attorneyjeremy1) <a href=\"https:\/\/twitter.com\/attorneyjeremy1\/status\/1644907190455529473?ref_src=twsrc%5Etfw\">April 9, 2023<\/a><\/p><\/blockquote>\n<p> <script async=\"\" src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>Hogan stated that the U.S. Securities and Exchange Commission (SEC) in its suit against Ripple \u201cfailed to legally prove the existence of an implied or explicit investment contract.\u201d<\/p>\n<p>Instead, the regulator relies on sale agreements and the <a href=\"https:\/\/www.investopedia.com\/terms\/h\/howey-test.asp\">Howey test<\/a>.<\/p>\n<p>Hogan also argues that all securities cases on which the SEC relies to determine an \u201cinvestment contract\u201d involved some form of contract between the parties. In the Ripple case, there is none.<\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>\u201cIndeed, how can a person reasonably rely on the offeror to obtain a profit if they have no legal remedy,\u201d<\/p>\n<\/blockquote>\n<p>The lawyer argues that the core question is not whether Ripple used money from selling XRP to fund its business, but whether the SEC proved the existence of a contract between token buyers and the company.<\/p>\n<blockquote class=\"twitter-tweet\" data-conversation=\"none\">\n<p lang=\"en\" dir=\"ltr\">If the result seems harsh, keep in mind that the designation \u00absecurity\u00bb is not meant to protect a would-be investor from making bad decisions.<\/p>\n<p>The securities laws are only to require that offerors make certain disclosures regarding the contract that the purchaser is entering.<\/p>\n<p>\u2014 Jeremy Hogan (@attorneyjeremy1) <a href=\"https:\/\/twitter.com\/attorneyjeremy1\/status\/1644907211456405504?ref_src=twsrc%5Etfw\">April 9, 2023<\/a><\/p><\/blockquote>\n<p> <script async=\"\" src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>\u201cRemember that the definition of a security is not designed to protect a potential investor from making bad decisions. Securities laws require only that offerors disclose certain information about the contract,\u201d Hogan explained.<\/p>\n<\/blockquote>\n<p>Attorney Todd Phillips said that the Howey test is \u201cnot the best way to determine an investment contract.\u201d<\/p>\n<p>He argues that for a more precise result one needs to study the contract itself, post-sale legal obligations, and the right to a share of profits. In his view, if such a framework were adopted, crypto assets would become commodities and fall under the jurisdiction of the <span data-descr=\"U.S. Commodity Futures Trading Commission\" class=\"old_tooltip\">CFTC<\/span>.<\/p>\n<blockquote class=\"twitter-tweet\" data-conversation=\"none\">\n<p lang=\"en\" dir=\"ltr\">The argument is: Howey isn\u2019t the best way to decide what is an \u00abinvestment contract.\u00bb You also need a contract, post-sale legal obligations, and the right to share profit.<\/p>\n<p>If this becomes the test, then crypto assets are most likely commodities, giving the CFTC jurisdiction. 2\/<\/p>\n<p>\u2014 Todd Phillips (@tphillips) <a href=\"https:\/\/twitter.com\/tphillips\/status\/1644778926470823942?ref_src=twsrc%5Etfw\">April 8, 2023<\/a><\/p><\/blockquote>\n<p> <script async=\"\" src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>In December 2020, the SEC <a href=\"https:\/\/u1f987.com\/en\/news\/sec-files-suit-against-ripple\">filed a lawsuit<\/a> against Ripple, accusing it of selling unregistered securities in the form of XRP to retail investors.<\/p>\n<p>A partner at the law firm Davis Polk and former SEC official Joseph Hall said the regulator <a href=\"https:\/\/u1f987.com\/en\/news\/former-sec-official-foresees-regulators-defeat-in-ripple-lawsuit\">had high odds of losing the case on the merits<\/a>. However, he expressed doubts about a swift conclusion to the proceedings.<\/p>\n<p>In late March 2023, <a href=\"https:\/\/u1f987.com\/en\/news\/xrp-rallies-on-rumors-of-a-favorable-outcome-in-sec-case-against-ripple\">reports emerged<\/a> that Ripple had good odds of a favorable conclusion to the litigation. In light of this, XRP rose by 15%.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Ripple&#8217;s XRP token is not a security and only &#8216;possibly fits the definition of an investment contract&#8217;. This view was expressed by lawyer Jeremy Hogan.<\/p>\n","protected":false},"author":1,"featured_media":76925,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"1","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[1162,112,128],"class_list":["post-76924","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-court-cases","tag-ripple","tag-sec"],"aioseo_notices":[],"amp_enabled":true,"views":"49","promo_type":"1","layout_type":"1","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/76924","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/comments?post=76924"}],"version-history":[{"count":1,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/76924\/revisions"}],"predecessor-version":[{"id":76926,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/76924\/revisions\/76926"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media\/76925"}],"wp:attachment":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media?parent=76924"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/categories?post=76924"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/tags?post=76924"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}