Ripple CLO Exposes How SEC Ignores Law And Brags About It
May 15 2023 - 4:50AM
NEWSBTC
The legal battle between Ripple Labs and the US Securities and
Exchange Commission (SEC) in the US District Court of Southern New
York is still awaiting a ruling from Judge Analisa Torres. Just
last week, Ripple CEO Brad Garlinghouse downgraded expectations,
stating that a ruling would likely come in “two to six months”
rather than the first half of 2023. However, this is not stopping
Ripple’s Chief Legal Officer (CLO) Stuart Alderoty from continuing
to attack the SEC and expose its unlawful legal practices. Via
Twitter, Alderoty shared a court decision over the weekend that
shows just that. Ripple CLO Exposes Unlawful Guidance By SEC
Specifically, it concerns the “common enterprise” issue that is a
component of the Howey test. The Ripple CLO writes that in the 1946
Supreme Court case “Howey”, the SEC unsuccessfully tried to pull
off a trick that it is unpacking again today. At the time, the SEC
wanted to enforce that an investment in a “common enterprise” was
not required as long as there was a “common interest”. Related
Reading: Ripple CTO Labels BEN Coin As Scam, Bitboy Reacts “The SEC
was wrong then and it is wrong now. Common Interest ≠ Common
Enterprise,” wrote Alderoty, who also shared the text of the writ.
XRP community attorney John E. Deaton added that the SEC’s
framework for digital assets ignores just that: The SEC is so
arrogant that it ignores the law and brags about it. The SEC’s
website, where the “Framework for Investment Contract Analysis of
Digital Assets” can be found, states that in order to satisfy the
“common enterprise” aspect of the Howey test, federal courts
require that there be either “horizontal commonality” or “vertical
commonality” (Revak v. SEC Realty Corp.). Related Reading: XRP
Holds Above Key Support As Ripple CEO Predicts Delay Of Verdict The
Commission, on the other hand, does not require vertical or
horizontal commonality per se, nor does it consider a “common
enterprise” to be a distinct element of the term “investment
contract”. On that basis, Alderoty said in a follow-up tweet: The
Revak case exposes yet another SEC sleight of hand. Without a
‘common enterprise’ it matters not whether ‘the fortunes of
investors’ are tied to the efforts of others. The Howey test is not
‘so easily satisfied.’ Whether Judge Torres will agree and rule in
Ripple’s favour remains to be seen. The pressure on the judge is
likely to be intense, especially in light of the US Democrats’
attack on crypto. XRP Price Above Key Support At press time, XRP
was trading at $0.4280, holding above the key support level of
$0.4131 over the past few days. This support is crucial as a break
below it would send the XRP price back into the early November 2022
to mid-March 2023 trading range, a signal the bulls should avoid at
all costs. Featured image from FinanceFeeds, chart from
TradingView.com
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