Ripple officer says SEC is wrong over the claim that all XRP holders are involved in a “common enterprise”

Stuart Alderoty explained how the US Securities regulatory body is wrong over the “common enterprise” argument in the XRP lawsuit.

Ripple is a blockchain firm, known for providing global payment solutions with the help of XRP Ledger (XRPL)’s XRP coin. Since Dec 2020, Ripple is facing huge legal hurdles in the US because of a lawsuit, initiated by the United States Securities and Exchange Commission (SEC) over the nature of the XRP coin & Ripple’s business.

On 13 May 2023, Ripple chief legal officer Stuart Alderoty pointed out a case of 1946 where the US SEC body failed to prove the “common enterprise” argument in the court against the defendant entity.

According to the Ripple officer, the SEC body was wrong and also wrong in the XRP lawsuit.

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In 1946, in its Sup Ct “Howey” brief, the SEC unsuccessfully argued that an investment in a “common enterprise” was unnecessary provided there was a “community of interest”. The SEC was wrong then and it is still wrong now. Common Interest ≠ Common Enterprise. pic.twitter.com/RvH50b6Yjv

— Stuart Alderoty (@s_alderoty) May 13, 2023

On 14 May, Ripple’s legal officer pointed out another lawsuit in which the SEC body failed to prove the “common enterprise” argument in court. 

According to Alderoty, Without a “common enterprise,” it does not matter whether “the fortunes of investors” are tied to the efforts of others and also added that the Howey Test is also not applicable to the XRP coin.

The Revak case exposes yet another SEC sleight of hand. Without a “common enterprise” it matters not whether “the fortunes of investors” are tied to the efforts of others. The Howey test is not “so easily satisfied.” https://t.co/1BFcnxHAMM pic.twitter.com/kDSSh2EC7O

— Stuart Alderoty (@s_alderoty) May 14, 2023

Ripple vs SEC 

Through the XRP Lawsuit, the SEC body alleged that the XRP coin is a security & that should be registered with the corresponding regulatory body. 

Also, the SEC body charged the Ripple labs & Ripple’s top executives over the sale of more than $1.2 billion worth of unregistered securities publicly.

Recently Ripple CEO Brad Garlinghouse said that the lawsuit is very near to its end and the final judgement will come before Q3 of this year. 

Read also: 32% of family offices across the globe have exposure to Cryptocurrencies

Ripple officer says SEC is wrong over the claim that all XRP holders are involved in a “common enterprise”

 

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