<\/p>\n
In the ongoing debate on Ripple (XRP) and its intrinsic value, attorney Deaton\u2019s response to Australian-based lawyer Bill Morgan\u2019s criticism of the U.S. Securities and Exchange Commission\u2019s (SEC) stance has sparked further discussion.<\/p>\n
The central point of contention lies in whether XRP possesses intrinsic value, a question that holds significant implications for the regulatory classification of the cryptocurrency.<\/p>\n
\nMaybe the SEC should read Howey again:<\/p>\n
\u201cThe test is whether the scheme involves an investment of money in a common enterprise with profits to come solely from the efforts of others. If that test be satisfied, it is immaterial whether the enterprise is speculative or\u2026 pic.twitter.com\/qr1yqyhLRo<\/a><\/p>\n
\u2014 John E Deaton (@JohnEDeaton1) August 28, 2023<\/a><\/p>\n<\/blockquote>\n
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- Morgan\u2019s critique of the SEC centers on its argument that XRP lacks intrinsic value. This argument was purportedly presented during the summary judgment<\/a> phase of the Ripple case, as well as in the SEC\u2019s request to submit an amicus brief.<\/li>\n
- The agency\u2019s position on XRP\u2019s intrinsic value is crucial as it influences whether the token is considered a security under the Howey test.<\/li>\n
- Deaton responded to Morgan\u2019s criticism<\/a> by advocating for a reexamination of the Howey test \u2013 a legal standard used in the United States to determine whether certain transactions qualify as investment contracts and, thus, securities.<\/li>\n
- In support of his stance, attorney Deaton referenced a specific portion of the Howey test<\/a>, emphasizing that the essence of the test lies in determining whether a scheme encompasses investing money in a joint venture where profits are derived solely from the endeavors of others.<\/li>\n
- If this criterion is met, the distinction between a speculative or non-speculative enterprise or whether a property is sold with or without inherent value becomes inconsequential.<\/li>\n
- Notably, Deaton earlier detailed an account of the testimony provided by former SEC director Bill Hinman in the Ripple case. Deaton reported that Hinman, under oath, stated that the SEC is not required to fulfill all aspects of the Howey test to establish that a sale meets the criteria of an investment contract.<\/li>\n<\/ul>\n
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