Chatter among the legal community has increased in recent days as a verdict is now expected by some on or before May 6, with others admitting the SEC has one valid claim.
According to Bill Morgan, a pro-XRP lawyer, the US Securities and Exchange Commission (SEC) may be right about investors buying XRP with the expectation of Ripple winning the ongoing case against the SEC.
The claim is part of the SEC’s ongoing legal battle with Ripple, in which the regulatory body alleges that XRP is an unregistered security.
The SEC’s expert has reportedly acknowledged that the returns from Bitcoin and Ethereum account for most of XRP returns from mid-2018 to the present. However, the SEC continues to argue that XRP investors depend on Ripple’s efforts for profits.
Morgan’s statement suggests that some people who support Ripple and XRP recognize the validity of some of the SEC’s claims, even as they argue against the overall legal case against the cryptocurrency.
Morgan further stated that if the SEC’s expert analysis is accurate, Ripple would be accountable for the price fluctuations of Bitcoin and Ethereum impacting XRP’s value.
In addition, Morgan argues that Ripple’s position as a centralized entity gives it control over the price of XRP. This raises questions about the decentralization of XRP and the role of Ripple in its market performance.
“But if the SEC’s expert is correct, you would need to posit that Ripple is allowing in some way XRP’s price to be controlled by price movements of Bitcoin and Ethereum to maintain Ripple is controlling the price as a centralized actor.”
Bill Morgan supports this claim of the SEC against Ripple
Per Morgan, the regulator’s claim acknowledges investors may be banking on Ripple’s legal endeavors to reap gains rather than the company’s business efforts.
This suggests that the outcome of Ripple’s legal battle against the SEC holds substantial weight in terms of the value of XRP. As such, it highlights the crucial role that the lawsuit plays in shaping the future of cryptocurrency and its investors.
“Paradoxically, the SEC may be correct about investors relying on Ripple’s efforts but not because of Ripple’s business efforts or sales of XRP, but its legal efforts defeating the SEC’s lawsuit should it be successful,” said Bill.
Morgan’s statement emphasizes that investors relying on Ripple’s influence to bolster the value of XRP have little to do with the efforts that the judge in the historic Howey case had in mind.
Expert’s opinion regarding the legal battle
The Securities and Exchange Commission’s lawsuit against Ripple has prompted many supporters of the XRP token to comment on the third and fourth prongs of the Howey Test.
This legal framework determines whether an asset qualifies as an investment contract, and the SEC has invoked it to argue that XRP should be considered an unregistered security.
As the legal battle between Ripple and the SEC continues, pro-XRP lawyers like Bill Morgan, John Deaton, and Jeremy Hogan have raised doubts about the SEC’s argument.
Specifically, these lawyers have questioned the agency’s reliance on the Howey Test to argue that XRP is an investment contract.
John Deaton has suggested that Judge Torres may view Ripple’s action as an offering. Deaton expressed his skepticism about Ripple’s counter-argument that there was no underlying contract to qualify the move as an investment contract.
According to Deaton, this argument may pass in the Second Circuit and Supreme Court, but Judge Torres may not be persuaded by it.
Deaton forecasts verdict date for Ripple vs. SEC legal battle
As the crypto community eagerly awaits the summary judgment in the Ripple vs. SEC lawsuit, John Deaton also provided insight into the potential ruling date.
During an interview with Thinking Crypto, Deaton, representing thousands of XRP holders in the lawsuit, predicts that Judge Torres will deliver her ruling on or before May 6.
Deaton bases his prediction on Judge Torres’ ruling timeline in past cases, noting that she typically delivers summary judgments within two months of deciding on Daubert motions. XRP holders and the wider crypto community will watch closely for Judge Torres’ decision as the case progresses.
Deaton added that the summary judgment for the Ripple v. SEC case might be handed down at any time and that the ruling could be delayed until June 1 or later.
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