Ripple’s chief legal officer Stuart Alderoty disagrees with the SEC’s classification of XRP as a security.
According to Alderoty, the Supreme Court of the United States decided against the SEC in a case from 1946.
Ripple has opposed the SEC’s contention that the XRP cryptocurrency is a security, in what has become one of the longest (and costliest) legal fights in the history of the cryptocurrency industry.
The SEC claimed in court that XRP is a security. Ripple may have broken the law by failing to register the token with the SEC if it is determined that the token is a security.
The crypto industry will be profoundly affected by the final verdict on the SEC’s charges. The commission’s stubborn emphasis on digital assets’ securities character has led to some fascinating developments.
Moving ahead, the crypto community may be provided with a definitive court verdict in the Ripple case. In his tweet, Alderoty alludes to the 1946 case SEC vs. W.J. Howey Co, in which the court sided with the Howey Company.
Buyers in Florida were able to purchase citrus orchards through the Howey Company. They would give Howey a lease on the property again.
The SEC argued at the time that Howey’s operation amounted to selling unregistered securities since the transactions were investment contracts, much as it does today with Ripple.
The Supreme Court, however, decided that the contracts Howey had with his customers did not qualify as investment agreements. Since then, the decision has become a landmark case for determining whether or not a certain asset or transaction falls within the purview of securities legislation.
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