John Deaton: XRP Should Not be Considered a Security
Prominent lawyer John Deaton has reiterated his stance that XRP, the cryptocurrency associated with Ripple, should not be considered a security. He compared XRP to Bitcoin and argued that both assets retained their status as digital commodities despite being marketed and sold as investment contracts in the past.
- Deaton highlighted the SEC v. Shaver’s case, where Bitcoin was sold as an investment contract but still classified as a digital commodity. He argued that disregarding XRP’s nature would require Judge Torres to ignore a significant portion of the SEC’s theory.
- Deaton disagreed with claims that Judge Torres might not address the token or secondary sales in her summary judgment decision, citing the Telegram case where Judge Castel considered secondary market sales.
- In the Telegram case, Telegram raised $1.7 billion through private investments, but the SEC sought to block the distribution of Grams, arguing that initial purchasers would resell them as securities. Judge Castel dismissed Telegram’s characterization of Grams as security.
- Deaton emphasized that the Telegram case involved an ICO with written contracts, and the SEC successfully pursued a preliminary injunction. He suggested that this interpretation could have negative implications for Ripple’s intention to create a secondary market for XRP.
- Deaton’s argument highlights the importance of considering the unique characteristics of digital assets like XRP in the regulatory landscape.
Hot Take: John Deaton’s argument provides valuable insight into the ongoing Ripple lawsuit and the potential implications for the classification of XRP as a security. It emphasizes the need to consider the evolving regulatory landscape when assessing digital assets.
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