Ripple advocate James K. Filan has briefly summarized the SEC’s argument in his opinion. According to him, although the regulator does not explicitly state that XRP is a security, its major line of defense is that any purchase of the token is, in actuality, an investment with other XRP holders and with Ripple.
While XRP may not be a security per se, the only way it can be offered or sold is as a security, he continued. “And when you grasp what the SEC is saying, regardless of how it is presented, the SEC wants a judgment that encompasses secondary sales.”
SEC considers every unit of XRP, to be an investment contract with Ripple and unregistered securities, even if it is purchased and sold on the secondary market by people who are not affiliated with or familiar with the firm.
Ripple, on the other hand, argued that XRP is not a security because it has no “post-sale” obligations to purchasers and slammed the plaintiff’s stance as “overreaching and illegal”.
Last week, the San-Francisco-based payment firm filed its application seeking a summary judgment as there is no “investment contract” giving investors rights or obliging the issuer to perform in their best interests.
In a similar manner, the SEC is requesting a decision in its favor without a trial, arguing that purchasing the token involves an “investment in a shared company with other XRP holders and with Ripple” and that purchasers anticipate making a profit.
That said, the XRP litigation has drawn focus from the crypto community. David Gokhshtein, the founder of Gokhshtein Media, recently commented that a victory for Ripple would significantly affect the entire crypto market.
Ripple’s Win Will Trigger XRP Price Explosion
A dramatic XRP price explosion could result from the court judgment in Ripple’s favor in the legal battle with the agency.
The SEC filed the action in December 2020 after alleging that Ripple and two of its senior executives, Chris Larsen and Brad Garlinghouse, sold XRP tokens worth more than $1.3 billion while misleading investors into believing they would receive substantial returns on the company’s earnings.
Gokhshtein praised the XRP Army in a different tweet. He said that it takes “patience and diamond hands” to endure such a hard legal process.