While the end of the long-running XRP lawsuit case with the United States (US) Securities and Exchange Commission (SEC) is still highly 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’s claims on Ripple.
Initiating a lawsuit, this claim to the Ripple company that owns XRP Involved that the company has been selling the XRP tokens as “unregulated security.” However, according to attorney Jeremy Hogan, XRP is nothing like “security.”2
Why is XRP not a security?
With the XRP Lawsuit Case still in progress, Hogan was eager to present his opinion supported with references and details linked to sections of the code.
Related Reading: XRP Pulls Back 15% After Hitting a 10-Month High of $0.58 in the Last Week
Opposing the SEC’s lawsuit against Ripple, Hogan stated that “XRP is not a security” and this is because “under the legislative definition of security”, XRP can only be considered a security if it fits the definition of an investment contract.
However, since it is not classified into categories of other related securities, such as stocks or bonds, the asset cannot be viewed as a security. Hogan further noted that even the US SEC “has not been able to argue that there was an implicit or explicit investment contract 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 that it proves. But that argument tears the ‘investment’ out of the ‘contract’ as a simple purchase, without more, it cannot be an ‘investment contract’, it is only an investment (like buying an ounce of gold) since Ripple is under no obligation to do so. . do anything except transfer the asset.
Hogan reflected further on the Howey test, a US Supreme Court case to determine whether a transaction qualifies as an investment contract, which the company Ripple has since passed amid denying the SEC’s assertion of offering an investment contract.
Hogan said that the “blue sky” cases, on which Howey’s case depends to define the “investment contract”, all had a “contract” regarding “investment”. At the end of the note, the lawyer he mentioned that the “issue is NOT whether Ripple used the money from the sale of XRP to finance its business.”
However, the problem is more if the SEC has shown that there was an implicit or explicit contract between the buyers of Ripple and XRP in relation to their “investment”. Meanwhile, “there was no such contract.”
Related Reading: Bring XRP Back Into Coinbase Trends Again, Here’s Why
XRP Price Action Amidst Ongoing Lawsuit Case
Regardless of the ongoing lawsuit with the SEC, XRP has peaked in 10 months in the middle of the saga, more than 30% in the last 30 days. However, since reaching a price as high as $0.57, XRP has seen a setbackand is currently down almost 4% in the last week with a trading price of $0.50, at the time of writing.
XRP’s market capitalization has mirrored its price action. Its market capitalization, which was seen in a range of $18 billion as of March 11 before rising to a high of $29 billion on March 30 has now also plummeted and is currently worth $26 billion.
Featured image from iStock, Chart from TradingView
