With the outcome of the Ripple SEC lawsuit looming, attorney Jeremy Hogan has taken to Twitter to make a persuasive case for why XRP should not be considered a security.
According to Hogan, XRP does not meet the legislative definition of security and can only be classified as an “investment contract.” This analysis is based on the Howey case and progeny, which establishes the test for determining whether a financial instrument is a security.
Hogan notes that in the Joiner case, the court found that an “investment contract” requires an enforceable agreement between the offeror and purchaser. However, in the Ripple case, the SEC has not argued that such an agreement exists.
Instead, the SEC claims that the purchase agreement is sufficient evidence to prove XRP is a security. Hogan argues that this interpretation effectively separates the “investment” from the “contract,” which is not supported by case law.
Furthermore, Hogan points out that all of the “blue sky” cases dictate the definition of an “investment contract” as having a contractual component. He argues that without a contract, there can be no reasonable expectation of profit from the efforts of others, which is a crucial element of the Howey test.
Hogan acknowledges the limited case authority but concludes that the SEC has not successfully demonstrated an implicit or explicit contract between Ripple and XRP buyers. As a result, XRP cannot be classified as a security in the absence of such a contract.
Hogan’s thread on Twitter provides a compelling argument against the SEC’s classification of XRP as a security. His analysis is based on established case law and highlights the importance of the contractual component in determining whether a financial instrument is an investment contract.
With the decision on the Ripple SEC lawsuit imminent, Hogan’s argument could be crucial to the case outcome. Whether Judge Torres will consider Hogan’s analysis in her decision remains to be seen.
Mixed Reactions To The Ongoing Ripple’s XRP Lawsuit
However, his thread on Twitter has garnered significant attention in the cryptocurrency community, with many users sharing his argument and expressing their support for XRP.
However, one community member, Pratik Bhattarai, expressed his frustration about the length of the ongoing lawsuit and the lack of a clear end in sight.
Hogan admitted he was wrong about his previous predictions and doesn’t know when the case will end. Bhattarai expressed his admiration for Hogan’s work but questioned the workings of the American judiciary system, asking if there is a time limit for the case.
Not everyone is worried. Another community member believes Ripple has already won, given their status as one of the biggest tech companies in the space, with partnerships like no other. XRP, the native token used to facilitate payments around the globe, is fast, frictionless, and cheap.
Related Reading | Ethereum’s Mysterious Whales: Accumulating Millions & Bullish On The Future