Crypto Lawyers Predict SEC Will Lose Lawsuit Against Ripple

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US-based blockchain company Ripple has to fight the long war with US Securities and Exchange Commission (SEC.) likely to win, legal experts say, arguing that the agency may have shot itself in the foot.

Some legal observers say the agency has completely failed to prove its case, according to a Forbes report. A major reason for the authority’s demise could be the thousands of XRP holders who intervened in the case: although they were unable to appear as defendants along with Ripple, the judge allowed them to file amicus briefs so that their voices were also heard .

Attorney Jeremy Hogan was quoted as saying that

“The SEC can only succeed in its motion for summary judgment if the judge [Analisa] Torres “forgets his first year of law school”.

In addition, well-known legal experts, namely Curt Levey from Federalist Society and Professor JW Verret from Scalia School of Law from George Mason University, at

“Ripple is on track to win this case.”

And that’s not all. Verret said that if the SEC decides to appeal to the Supreme Court,

“Not only is she likely to lose, but she will set a broad precedent that will limit or eliminate the application of the Howey test to cryptocurrencies that defy the 1946 definitions.”

The Howey test relates to the US Supreme Court case regarding whether a transaction qualifies as an “investment contract” and therefore a security.

According to Forbes,

“The ruling could drastically limit the SEC’s power to regulate cryptocurrencies in the US. If it ends up like this, it will have been a self-inflicted disaster from the start.”

The SEC filed the case against Ripple and its officials in December 2020, alleging that XRP tied to Ripple is an unregistered security. She claims that it has been a security since 2013 and that the sales of billions of XRP on the secondary market in the seven years prior to the lawsuit were also securities.

But as reported by Forbes, 75,000 XRP holders, led by attorney John Deaton, have joined the suit, and more than 3,000 of them have provided statements to Ripple’s defense team, saying they have “never heard of the company they allegedly invested in before the SEC filed the case.”

The report notes that unlike Ripple, the SEC had “no allies” and that other XRP users unaffiliated with Ripple have filed amicus briefs, as have Digital Chamber of Commerce and Blockchain Association.

Crucially, Ripple also sought the Hinman documents and fought hard to get them — they finally got them from the SEC recently, earlier this month. These are relevant because former director of corporate finance William Hinman famously said in a speech in 2018 that Ethereum (ETH) is not a security. Therefore, the internal SEC emails and drafts that form the basis of this speech are highly relevant to the Ripple case.

The SEC, according to Forbes, is “driving that bus off a cliff” because they are trial lawyers, but also because SEC Chairman Gary Gensler is “ultimately a political figure.” According to attorney John Deaton, Gensler cannot win this case, but he needs a victory over such a large company in the industry, which would “prove” him right, adding:

“What does the politician do? He takes the guaranteed political victory”.

Meanwhile, Ripple’s General Counsel, Stuart Alderoty, said that if the SEC clearly stated that XRP is not a security, the case would be settled quickly.

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