Invoice Morgan, a crypto lawyer and digital asset fanatic, shares that his ongoing evaluate of the Daubert problem paperwork reveals a major weak spot within the SEC arguments in opposition to Ripple.
Then there was the SEC’s argument that the professional proof of a Ripple professional on therapy of XRP underneath different authorized or business regimes is irrelevant. The proof is that based mostly on its financial traits it isn’t a safety /4
— invoice morgan (@Belisarius2020) February 1, 2023
In a thread of tweets, Morgan said that one attention-grabbing factor he found whereas reviewing Ripple’s response to the SEC’s Daubert problem was the company’s inconsistencies, or “typical change of place.” He cites situations.
First, an SEC professional opined on the viability of Ripple’s cross-border remittance product, alleging that ODL was not a real use case for XRP.
The SEC revised its place and stated the matter was irrelevant after Ripple’s professional refuted the SEC’s assertions and demonstrated that cross-border remittance use was possible.
Ripple argued that the ”the hypocrisy means that the SEC is adopting its litigation positions to additional its desired aim and never out of a devoted allegiance to the legislation.”
Putting proof: XRP isn’t safety, underneath GAAP
Morgan added that the SEC argued that the proof offered by a Ripple professional relating to the therapy of XRP underneath different authorized or business regimes was irrelevant.
From @JWVerret final October re GAAP and #XRP: “It could be the practical equal of telling Google they need to record “the web” as an asset on its stability sheet as a result of Google’s worth is intently linked to the web.” https://t.co/SBWEitwGW8
— CryptoLaw (@CryptoLawUS) February 2, 2023
The proof was that, based mostly on its financial traits, XRP isn’t a safety.
Ripple’s response to the SEC goes thus:
Even when safety can imply one factor underneath federal securities legislation and one other underneath Treasury rules, CFTC rules, federal tax legal guidelines, and GAAP, the sensible therapy of XRP underneath these different legal guidelines and rules – and the SEC’s lengthy silence about it – is very related as to if an goal particular person had truthful discover that the SEC would instantly, a few years later, declare that XRP is a safety.
It continued, “This level is particularly sturdy with respect to GAAP as a result of the SEC itself has regulatory authority over GAAP. Proof that XRP isn’t a safety underneath GAAP reveals that even a framework underneath the SEC’s personal supervision contradicts the SEC’s litigating place on this case.”