John E. Deaton, a legal expert and popular in the crypto community as the Founder and Host of CryptoLaw, has recently joined the long line of experts discarding SEC’s ‘Utility’ argument about XRP in the lawsuit against Ripple.
It began last year during late December when former Securities and Exchange Commission (SEC) Chairman Jay Clayton filed a lawsuit against Ripple and two of its executives. The lawsuit alleged Ripple had been selling unregistered securities since 2013 in the form of XRP. SEC’s argument against XRP being security was two-fold. First being XRP’s lack of Utility which would put it in the securities category instead of a currency, and the second argument said that all XRP holders have taken part in a “common enterprise” with Ripple.
Both claims backing XRP’s lack of utility were turned down by the court. Furthermore, SEC’s utility argument has been derided for “lacking utility itself” by experts.
“The open-source nature of XRP allows users throughout the world to use the token to pay for goods and services without any connection to or reliance on Ripple. According to Cryptwerk, over 1,300 companies currently accept XRP for payment across industries from business services to tourism and travel… I have been contacted by over 19,000 XRP holders from around the world, many of whom receive paychecks in XRP and use XRP-powered debit cards to shop for groceries and pay for gas. These people are not in “common enterprise” with Ripple, despite the SEC’s claims.”, wrote John E. Deaton in his blog about SEC’s lawsuit against Ripple.
SEC tactics come to a close
U.S Magistrate Judge Sarah Netburn ordered the SEC in April, to put together documents, including certain internal and external communications; accompanied by a log of privileged documents. However, the SEC has shown resistance with no news on any documents, regardless of the extensive timeline. Along with that, SEC has refused submission of other determining documents like communications from the Office of Investor Education and Advocacy or its financial technology email inbox, [email protected]
Ripple has requested the court for the third hearing instead of a pending verdict due to a delayed hearing and lack of cooperation from the SEC. Securities and Exchange Commission has built a franchise of unethical, questionable, and baseless investigation and litigation tactics.
SEC is currently involved in many high-profile nonfraud crypto cases like Kik and Telegram. The commission has not been serving in the public interest and with a considerable lack of transparency which has become evident over time with rising anecdotes from different people who had fallen prey to SEC’s tactics.