The crucial legal battle between Ripple and US SEC, which is expected to provide clarity over crypto regulations has entered the Summary Judgment phase. However, the XRP community seems pretty confident over the blockchain firm’s motion in the Ripple lawsuit.
Will Ripple lawsuit end well for XRP?
Meanwhile, John Deaton, XRP lawyer in the Ripple lawsuit shared his word on speculation over the blockchain firm’s filed motion. He mentioned that Judge Torres will adopt Ripple’s argument is likely overconfidence.
There are two different Summary Judgment motions filed by the parties. Meanwhile, undisputed facts and testimony collected during discovery are yet to be revealed. This is the main reason that an utter legal analysis is difficult.
He highlighted that claiming that the SEC will not be able to prove that XRP is a security is a wholly different game than saying that the court will go with Ripple’s arguments.
The blockchain firm in the Ripple lawsuit claims that before you go for the Howey test, there should be an underlying contract between the seller and buyer.
Howey test is still the key
The SEC will be arguing over the language of the Howey test. They will be citing cases where this plain language was applied. An argument will come that the law does not require an underlying contract in the Ripple lawsuit. As the Howey test says that an investment contract is “a contract, transaction OR scheme.
Deaton added that the commission is going to focus on proving a scheme that includes XRP’s creation. It will mention that Ripple made efforts in creating value for the XRP token. This will also include creating a secondary market for the token.
However, the XRP lawyer in the Ripple lawsuit mentioned that Judge Torres could disagree with the argument. While it will still be a find for Ripple. The judge can reject it over the underlying contract theory but go with the Howey test.