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Ripple vs SEC: The end is approaching, who'll win?

Wed 12 Apr 2023 ▪ 3 min of reading ▪ by La Rédaction C.
Getting informed Crypto regulation

The outcome of the legal battle between Ripple and the SEC is eagerly awaited by the crypto industry. The stakes are huge for the industry. But increasingly, the chances of it losing this war seem to be shrinking. A legal expert explains why.

Les logos du Sec et de XRP

Impossible for SEC to prove XRP is a security

Many are hoping that the tug-of-war with the Securities and Exchange Commission (SEC) will turn out to the advantage of the crypto firm Ripple. This is a ray of hope for the entire industry. Especially when you know the regulatory policy, considered not very pragmatic, that it has been undergoing for several months. A situation that has made eminent actors of this sector react these last weeks.

Recently, Jeremy Hogan, a lawyer specializing in crypto issues, also spoke out on the Ripple vs SEC case. While the outcome of this legal battle seems to be the subject of speculation and concern, the lawyer has a strong opinion on the topic.

For him, the weight that should tip the scales in Ripple’s favor comes down to one simple legal fact. The SEC has yet to prove that XRP, Ripple’s native token, is a security.

This is the heart of the debate. Because proving that XRP is a security would mean proving that it can be the subject of an investment contract. This means establishing that the asset, such as a stock or a bond, can be the subject of an investment contract. This is something the SEC has so far failed to do.

In the Ripple case, the SEC has failed to argue that there was an implied or explicit contract of investment. Instead, it puts forward an argument that tears the “investment” from the “contract.” The SEC argues that the purchase agreement is all that is required, and that is all it proves.” says Hogan.

For Hogan, the attempt to equate “purchase contract” with “investment contract” in this case does not hold up legally. For, he explains, “a simple purchase, without more, there cannot be an investment contract.

In fact, apart from transferring the asset, there was no other obligation on Ripple. The question now is whether the courts will agree with this view. Its decision will in any case be decisive for the evolution of the crypto industry.

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La Rédaction C. avatar
La Rédaction C.

L'équipe éditoriale de Cointribune unit ses voix pour s’exprimer sur des thématiques propres aux cryptomonnaies, à l'investissement, au métaverse et aux NFT, tout en s’efforçant de répondre au mieux à vos interrogations.


The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.