Although the SEC vs. The end of the XRP litigation is still very uncertain, on April 9 a partner at the Hogan & Hogan law firm took to Twitter to counter the SEC’s allegations regarding Ripple with a series of posts.
The subject of the lawsuit is that Ripple, the company that owns XRP, sold XRP tokens as “unregulated securities,” according to the SEC filing. However, according to attorney Jeremy Hogan, XRP is nowhere near a security.
Why is XRP not a security?
The lawsuit related to XRP is still ongoing. However, Hogan enthusiastically shared it his opinion supported by details linked by references and code sections.
Hogan stated that “XRP is not a security“. According to him, this is because “according to the legal definition of a security, XRP can only be considered a security if it meets the definition of an investment contract”.
However, since XRP does not fall into the same categories as other securities, such as stocks or bonds, the asset is not considered a security. Hogan further noted that even the US SEC “nor did it argue that there was an implied or express investment contract in its lawsuit once morest Ripple.
The lawyer stated:
“Instead, he argues that the sale agreement is all that is needed – and that is all he proves. However, this argument tears the “investment” out of the “contract”. Because a simple purchase, without anything further, cannot be considered an “investment contract”. After all, it’s just an investment, just like buying an ounce of gold. According to this, Ripple has no obligation other than to hand over the asset to its owner.”
Hogan also reflected on the Howey case. This is one of the US Supreme Court cases for determining whether a transaction qualifies as an investment contract. The Ripple company has since submitted to this while denying the SEC’s claim that it offered an investment contract.
Hogan said the “blue sky” cases on which the Howey cases depend are “in the definition of “investment contract”, each of them had a “contract” in relation to “investment”.
At the end of the note, the lawyer mentioned that “a the question is NOT whether Ripple used the money from the sale of XRP to fund its business”.
However, the question is more whether the SEC has proven whether there was an implied or express contract between Ripple and the XRP buyers regarding their “investment”. Meanwhile “there was no such contract”.
XRP Price Movement Amidst Ongoing Lawsuit
Regardless of the ongoing litigation with the SEC, XRP has hit a 10-month high despite the saga. The exchange rate has increased by more than 30% in the last 30 days. In the past week, the price has fallen nearly 4%, and at the time of writing, it is trading at $0.51.