An XRP community member spots a major discrepancy in the SEC argument against Ripple.
Prominent XRP influencer Mr. Huber (@Leerzeit) has shared two documents showing a significant discrepancy in SEC’s arguments in its lawsuit against Ripple.
In a tweet yesterday, Mr. Huber pointed out that the SEC noted in its “Framework for Investment Contract Analysis of Digital Assets” that the status of development of a token is relevant in determining whether the project satisfies the third prong of the Howey Test.
In the document, the SEC asserts that a digital asset satisfies the third prong of Howey “if purchasers of a digital asset expect an AP [active participant] to be performing or overseeing tasks that are necessary for the network or digital asset to achieve or retain its intended purpose or functionality.”
However, the Securities and Exchange Commission made a contrary statement in its argument against Ripple. Responding to a question raised by Ripple Chairman Chris Larsen about the exact date the XRP Ledger became fully functional, the securities regulators argued that “whether and when the XRPL became fully functional is irrelevant under Howey.”
🚨Ain't no judge but damn! How could the @SECGov ever win? They claim in their token framework that the status of development is a relevant factor for the determination of the Securities status, yet in their lawsuit they say the status of development is not relevant at all. 🚨 pic.twitter.com/anaXoDNoAQ
— Mr. Huber🔥🦅🔥 (@Leerzeit) April 23, 2023
It remains to be seen whether the discovery might be influential in the final ruling of the lawsuit, which is expected to come any moment from now, as predicted by CryptoLaw founder attorney John Deaton.
XRP Community Members Slam SEC
The development has sparked reactions among XRP community members, who took to Twitter to slam the behavior of the Securities and Exchange Commission. A cryptocurrency enthusiast first knocked the SEC for being dishonest with the public and the law.
“The sec isn’t truthful to the public, nor the law,” he said.
In a similar development, Ashley Prosper, an XRP community member who alleges that JPMorgan influenced the Ripple v SEC lawsuit, said Judge Sarah Netburn was correct to describe the regulator as “hypocritical and unfaithful to the law.
Judge Netburn had it so right.
Hypocrital and unfaithful to the law.
— Ashley PROSPER (@AshleyPROSPER1) April 23, 2023
Recall that Judge Netburn, last July, slammed the SEC for not acting in faithful allegiance to the law but in pursuit of its goal of expanding its control over the emerging market. She made the comment based on the SEC’s shifting stance on the controversial William Hinman documents.
It is noteworthy that the SEC had initially argued that the controversial speech in which Hinman declared Bitcoin and Ethereum as non-securities represented his personal views and not the agency’s opinion.
Interestingly, when the SEC saw that it was losing the argument, it changed its stance, saying that attorney-client privilege protects the documents because Hinman consulted SEC lawyers while drafting the speech.
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