John Deaton, the attorney representing thousands of XRP investors in the ongoing lawsuit between Ripple, the San Francisco-based cross-border payment firm, and the U.S. Securities and Exchange Commission (SEC), has recently told the regulator to go after Ripple if it has a case, but should not hurt the innocent XRP investors.
In a recent interview with FOX Business, John Deaton said, “In 76 years when you look at all the sec cases coming from the Howie case there’s never been a case where there’s been absolutely no privity between the purchaser and the buyer.
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According to the XRP investors’ attorney, the Howey test used by the SEC as a weapon in the XRP lawsuit refers to sales, service contracts, and schemes, as securities, but not the underlying asset.
Considering the interpretation of the Howey test, Deaton said XRP cannot be termed as security. He stated that the regulator should go after Ripple if it has a case about breaching the United States Securities laws through its Initial Coin Offering (ICO) of 2013, but XRP investors should be left unhurt.
“SEC, if you can prove the case against Ripple, go out, go at it right now, do your job,” John Deaton emphasized.
In the course of the interview, he said to claim XRP becomes security with Ripple after ten years means that the SEC is stretching the Howie test beyond recognition, which will hurt XRP investors in the long run.
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Deaton emphasized that innocent investors have been buying XRP on various exchanges over the years with nothing raised by the regulator about its security status. So, coming out now to claim it’s a security is like a deliberate attack on XRP holders.
The attorney said, “When you say that a person who has never heard of Ripple or has no idea of who Brad Garlinghous is, purchased [XRP] on Coinbase, [and you start] claiming that that token ten years later is an unregistered security with Ripple, now you’ve stretched that Howey case beyond recognition.”
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