- Legal struggle against the SEC seems to have a major bearing on the value of XRP.
- Judge Torres may consider Ripple’s behavior an offering, as proposed by John Deaton.
The SEC has been arguing in court that XRP is unregistered security as part of its continuing legal fight with Ripple. The U.S Securities and Exchange Commission (SEC) may be correct that investors are purchasing XRP in the hopes that Ripple would win the ongoing action against the SEC, according to pro-XRP lawyer Bill Morgan.
The crypto sector has been buzzing about this case as of late, with some predicting a judgment on or before May 6 and others conceding the SEC has one plausible argument against XRP.
The SEC’s expert allegedly agrees that Bitcoin and Ethereum returns are mostly responsible for XRP’s returns from the middle of 2018 to the present. The SEC, however, maintains that investors in XRP depend on Ripple for returns.
Morgan’s comments seem to imply that some Ripple and XRP supporters, while still arguing against the broader legal case against the cryptocurrency, admit the legitimacy of certain of the SEC’s accusations. Moreover, Morgan continued by saying that Ripple would be responsible for the price swings of Bitcoin and Ethereum influencing the value of XRP if the SEC’s expert opinion is correct.
Furthermore, Morgan claims that Ripple, as a centralized business, has monopoly power over the XRP pricing. The impact of Ripple on the market performance of XRP and its decentralization is called into doubt.
Outcome to Highly Impact XRP Price
According to Morgan, the assertion by the regulator shows that investors are placing their faith in Ripple’s legal efforts rather than the company’s economic activities.
Hence, the result of Ripple’s legal struggle against the SEC seems to have a major bearing on the value of XRP. In this way, the lawsuit’s significance in influencing the future of cryptocurrency and its investors is highlighted.
The crypto world is waiting for the summary decision in the Ripple vs. SEC litigation, and John Deaton has shed some light on when it could be issued. Deaton, who represents thousands of XRP investors in the action, told Thinking Crypto that he expects Judge Torres to issue her verdict on or before May 6.
Judge Torres has historically issued summary judgments within two months of ruling on Daubert motions, thus Deaton based his forecast on this fact. Judge Torres’ judgment will be keenly followed by those who possess XRP as well as the cryptocurrency world at large.
💯 we must listen to this. We must use the correct terminology within the proper narrative. Digital assets = software code, not securities. Digital assets, like any other commodity, can be marketed packaged offered and sold as a security but they are themselves, not securities. https://t.co/mNBbGYk7Zo
— John E Deaton (@JohnEDeaton1) April 9, 2023
The Howey Test, which the SEC uses to support its position that XRP is an investment contract, has been called into doubt by these attorneys.
Judge Torres may consider Ripple’s behavior an offering, as proposed by John Deaton. Moreover, Deaton doubted Ripple’s rebuttal that there was no underlying contract making the transaction a legal investment contract.