{"id":24053,"date":"2023-05-15T09:52:42","date_gmt":"2023-05-15T13:52:42","guid":{"rendered":"http:\/\/cryptocornercafe.com\/cafe\/?p=24053"},"modified":"2023-05-15T09:52:42","modified_gmt":"2023-05-15T13:52:42","slug":"ripple-clo-exposes-how-sec-ignores-law-and-brags-about-it","status":"publish","type":"post","link":"http:\/\/cryptocornercafe.com\/cafe\/2023\/05\/15\/ripple-clo-exposes-how-sec-ignores-law-and-brags-about-it\/","title":{"rendered":"Ripple CLO Exposes How SEC Ignores Law And Brags About It"},"content":{"rendered":"

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<\/a> expectations, stating that a ruling would likely come in \u201ctwo to six months\u201d rather than the first half of 2023.<\/p>\n

However, this is not stopping Ripple\u2019s Chief Legal Officer (CLO) Stuart Alderoty from continuing to attack the SEC and expose its unlawful legal practices. Via Twitter, Alderoty shared<\/a> a court decision over the weekend that shows just that.<\/p>\n

Ripple CLO Exposes Unlawful Guidance By SEC<\/h2>\n

Specifically, it concerns the \u201ccommon enterprise\u201d issue that is a component of the Howey test. The Ripple CLO writes that in the 1946 Supreme Court case \u201cHowey\u201d, 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 \u201ccommon enterprise\u201d was not required as long as there was a \u201ccommon interest\u201d.<\/p>\n

\u201cThe SEC was wrong then and it is wrong now. Common Interest \u2260 Common Enterprise,\u201d wrote Alderoty, who also shared the text of the writ. XRP community attorney John E. Deaton added that the SEC\u2019s framework for digital assets ignores just that:<\/p>\n

The SEC is so arrogant that it ignores the law and brags about it.<\/strong><\/p>\n

The SEC\u2019s website<\/a>, where the \u201cFramework for Investment Contract Analysis of Digital Assets\u201d can be found, states that in order to satisfy the \u201ccommon enterprise\u201d aspect of the Howey test, federal courts require that there be either \u201chorizontal commonality\u201d or \u201cvertical commonality\u201d (Revak v. SEC Realty Corp.).<\/p>\n

The Commission, on the other hand, does not require vertical or horizontal commonality per se, nor does it consider a \u201ccommon enterprise\u201d to be a distinct element of the term \u201cinvestment contract\u201d.<\/p>\n

On that basis, Alderoty said in a follow-up tweet:<\/p>\n

The Revak case exposes yet another SEC sleight of hand. Without a \u2018common enterprise\u2019 it matters not whether \u2018the fortunes of investors\u2019 are tied to the efforts of others. The Howey test is not \u2018<\/strong>so easily satisfied.\u2019<\/strong><\/p>\n

Whether Judge Torres will agree and rule in Ripple\u2019s favour remains to be seen. The pressure on the judge is likely to be intense, especially in light of the US Democrats\u2019 attack on crypto.<\/p>\n

XRP Price Above Key Support<\/h2>\n

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.<\/p>","protected":false},"excerpt":{"rendered":"

<\/p>\n

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<\/a> expectations, stating that a ruling would likely come in \u201ctwo to six months\u201d rather than the first half of 2023.<\/p>\n

However, this is not stopping Ripple\u2019s Chief Legal Officer (CLO) Stuart Alderoty from continuing to attack the SEC and expose its unlawful legal practices. Via Twitter, Alderoty shared<\/a> a court decision over the weekend that shows just that.<\/p>\n

Ripple CLO Exposes Unlawful Guidance By SEC<\/h2>\n

Specifically, it concerns the \u201ccommon enterprise\u201d issue that is a component of the Howey test. The Ripple CLO writes that in the 1946 Supreme Court case \u201cHowey\u201d, 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 \u201ccommon enterprise\u201d was not required as long as there was a \u201ccommon interest\u201d.<\/p>\n

\u201cThe SEC was wrong then and it is wrong now. Common Interest \u2260 Common Enterprise,\u201d wrote Alderoty, who also shared the text of the writ. XRP community attorney John E. Deaton added that the SEC\u2019s framework for digital assets ignores just that:<\/p>\n

The SEC is so arrogant that it ignores the law and brags about it.<\/strong><\/p>\n

The SEC\u2019s website<\/a>, where the \u201cFramework for Investment Contract Analysis of Digital Assets\u201d can be found, states that in order to satisfy the \u201ccommon enterprise\u201d aspect of the Howey test, federal courts require that there be either \u201chorizontal commonality\u201d or \u201cvertical commonality\u201d (Revak v. SEC Realty Corp.).<\/p>\n

The Commission, on the other hand, does not require vertical or horizontal commonality per se, nor does it consider a \u201ccommon enterprise\u201d to be a distinct element of the term \u201cinvestment contract\u201d.<\/p>\n

On that basis, Alderoty said in a follow-up tweet:<\/p>\n

The Revak case exposes yet another SEC sleight of hand. Without a \u2018common enterprise\u2019 it matters not whether \u2018the fortunes of investors\u2019 are tied to the efforts of others. The Howey test is not \u2018<\/strong>so easily satisfied.\u2019<\/strong><\/p>\n

Whether Judge Torres will agree and rule in Ripple\u2019s favour remains to be seen. The pressure on the judge is likely to be intense, especially in light of the US Democrats\u2019 attack on crypto.<\/p>\n

XRP Price Above Key Support<\/h2>\n

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.<\/p>\n

<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"colormag_page_layout":"default_layout","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[82],"tags":[],"class_list":["post-24053","post","type-post","status-publish","format-standard","hentry","category-blockchain"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/posts\/24053","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/comments?post=24053"}],"version-history":[{"count":0,"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/posts\/24053\/revisions"}],"wp:attachment":[{"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/media?parent=24053"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/categories?post=24053"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/tags?post=24053"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}