Prominent American investor Mark Cuban says Ripple made it clear that not every crypto buyer is an investor.
The recent filing by the SEC in its case against TerraForm Labs and its founder, Do Kwon, has continued to stir reactions among crypto enthusiasts. In its response to Kwon’s motion to dismiss, the SEC said Judge Torres made a wrong decision in the Ripple lawsuit.
Notably, the SEC indicated plans to appeal the ruling, where she declared Ripple’s XRP sales to retail investors as non-securities.
Cuban Faults SEC Assertion
Reacting, prominent American businessman Mark Cuban slammed the SEC over its response to Kwon’s motion. According to Cuban, in its filing, the SEC referred to every buyer of crypto assets as an investor.
He made this known during an exchange with Coinbase Chief Legal Officer Paul Grewal regarding SEC’s filing.
They also refer to every buyer as an investor in their filing. That's not the case and Ripple made that clear. Securities have one purpose, to be a security. For a DeFi or CEX buyer it's impossible to know why a buyer buys. But it is possible to look at the Blockchain and see…
— Mark Cuban (@mcuban) July 22, 2023
Cuban faulted the SEC’s claim, saying that Ripple made it clear in its recent victory against the commission that not all buyers are investors. The prominent American said securities have only one purpose- to become security.
Per Curban, it is impossible to understand why people buy crypto assets on both centralized and decentralized exchanges.
“But it is possible to look at the Blockchain and see there are transactions based on the utility of the token,” Cuban added.
Deaton and Coinbase CLO React
In response, Grewal described the SEC’s regulatory approach as hammers seeing everything as nails- a famous phrase by Abraham Maslow.
Yes. Hammers only see nails.
— paulgrewal.eth (@iampaulgrewal) July 22, 2023
Furthermore, pro-XRP lawyer John E. Deaton noted that he fully agrees with Cuban’s assertions.
— John E Deaton (@JohnEDeaton1) July 22, 2023
SEC Signals Plans to Appeal Ripple Ruling
It can be recalled that Ripple recorded a significant win against the SEC last week. After more than two years of intense legal battle, the court issued its much-anticipated summary judgment decision.
While the court found that Ripple’s programmatic XRP sales on exchanges do not constitute securities, it ruled that sales to institutional investors satisfy all prongs of Howey.
In its reasoning, the court noted that institutional investors expected to profit directly from Ripple’s efforts. However, the judge said buyers of XRP on secondary markets did not have similar expectations.
Interestingly, the embattled TerraForm Labs’ founder attempted to use Ripple’s victory to dismiss the SEC’s case against him and his company.
However, the SEC signaled its intention to appeal Judge Torres’ decision, which it believes is wrong.
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