Since its creation, Ripple and its XRP cryptocurrency have been embroiled in a legal battle with the US Securities and Exchange Commission (SEC) over whether XRP should be classified as a security. Recently, a lawyer has laid out his reasoning for why XRP is not a security.
The lawyer argues that XRP is not a security because it does not meet the criteria established by the US Supreme Court’s Howey Test. The Howey Test is used to determine whether an investment contract constitutes a security.
According to the lawyer, XRP does not meet the first prong of the Howey Test, which requires that the investment be made with the expectation of profits from the efforts of others. The lawyer argues that XRP is not an investment in Ripple or its business, but rather a digital asset that can be used for payments and remittances.
Furthermore, the lawyer argues that XRP is not tied to Ripple’s success and that its value is determined by market forces rather than the actions of Ripple or its executives. He also points out that XRP has been traded on cryptocurrency exchanges for years, and that the SEC has not taken any action against these exchanges.
The lawyer’s argument is significant, as it could potentially strengthen Ripple’s case in its legal battle with the SEC. Ripple has been accused by the SEC of selling XRP as an unregistered security, and the case has been ongoing since December 2020.
Ripple has consistently maintained that XRP is not a security, and has pointed to the fact that it is used as a means of payment and settlement in the RippleNet network. The company has also argued that XRP is not an investment in Ripple or its business.
The outcome of the legal battle between Ripple and the SEC is eagerly anticipated by the cryptocurrency community, as it could have significant implications for the classification of other cryptocurrencies. If XRP is ultimately determined to be a security, it could set a precedent for other cryptocurrencies that are similar in nature.
In conclusion, the lawyer’s argument that XRP is not a security could potentially bolster Ripple’s case in its legal battle with the SEC. The outcome of the case could have significant implications for the classification of other cryptocurrencies and the future of the cryptocurrency industry.
