Attorney Deaton finally requests to file Amicus Brief on behalf of XRP holders in the Ripple vs. SEC Lawsuit.
Attorney John Deaton, the founder of Crypto Law, has requested leave to file an amicus curiae brief on behalf of over 75,000 XRP holders in opposition to the SEC’s summary judgment motion and exhibits.
Recall that the SEC has repeatedly argued that XRP is a security using the Howey Test, which identifies whether certain transactions qualify as an investment contract.
According to the Supreme Court ruling in the Howey case, the Howey Test attempts to determine whether there is an “investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others.”
SEC Fails to Properly Analyze Howey Test in the Case
However, the SEC has consistently failed to make its argument by effectively using the Howey Test. Attorney Deaton said the SEC has struggled to pinpoint the common enterprise since the beginning of the case.
“The struggle is understandable considering the SEC has submitted that it ignores Howey’s second prong when applied to digital assets,” attorney Deaton stated in brief.
He argued that the SEC always returns to XRP whenever it fails to reconcile its position. Attorney Deaton also said the Securities and Exchange Commission sees XRP as an investment contract and a common enterprise.
Since the SEC believes XRP represents an investment contract and a common enterprise, all XRP purchases “automatically satisfy all prongs of Howey” from the agency’s point of view.
“The SEC’s obsession with focusing on the token and not on the circumstances surrounding the offering as a whole allows the SEC to sidestep a legitimate Howey analysis,” attorney Deaton added.
Deaton: Investors Suffer Huge Losses
The Crypto Law founder said the SEC’s case against Ripple would have been amusing if only innocent United States investors were not harmed.
“Buried underneath the $15 billion in losses are real people who have been severely harmed, not by market volatility, but because, at least, the SEC fundamentally misunderstands the underlying technology, or at worst, has been deliberately misleading to arrogate for the SEC’s optionality as this litigation progressed,” excerpts of the brief read.
Meanwhile, attorney Deaton is not the only one who believes the SEC is not offering a good analysis of the Howey test. As reported, Ripple stated in its summary judgment motion that the SEC does not have a legal theory to back up its claims.
Some legal experts have also predicted that the SEC may suffer a bruising defeat against Ripple following the lawsuit’s progress.