Attorney John Deaton, the lawyer representing over 71,000 XRP investors, has recently reiterated the belief of the teeming XRP community, which has been the bone of contention between Ripple and the United States Securities and Exchange Commission (SEC) since December 2020.
In a recent series of tweets, John Deaton mentioned a fact that proves XRP cannot be classified as a security under Howey.
Going by Gary Gensler’s recent statement before the U.S. Senate Banking, Housing, & Urban Affairs Committee, a small number of cryptocurrencies are non-security tokens, under which Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and others are classified.
Deaton’s major argument is that if you say XRP cannot be classified as a cryptocurrency like others, why did they allow the conversion of XRP into Bitcoin (BTC), Ethereum (ETH), and others on top crypto exchanges such as Coinbase, Kraken, and Uphold?
According to the popular attorney, this factor alone is a proof that XRP cannot be classified as a security under Howey.
Deaton further explained that in Howey, investors have no control, which makes conversion from one asset to another impossible.
In conclusion, he tagged the SEC’s effort to prove that XRP is a security as laughable, stating that the continued effort has caused economic loss for innocent XRP investors.
John Deaton noted:
“If holders of XRP maintain their XRP on an exchange such as Coinbase, Kraken, Uphold, etc., XRP holders, can CONVERT XRP into ETH, BTC, LTC, BTH or many other crypto assets. This factor alone takes XRP out of the classification of a security, under Howey.
“In Howey and its progeny, investors didn’t have possession and control of the oranges or the beavers to sell. And They certainly couldn’t CONVERT the oranges to apples!
“The SEC’s overbroad claim that XRP is a security today would be laughable if it hadn’t caused catastrophic economic loss to the innocent investors the SEC is supposed to protect.”