Crypto lawyer suggests this defense for Ripple in SEC lawsuit
-Crypto lawyer Bill Morgan believes that Ripple can boost its defense by pointing to XRP sales in 2021.
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-The lawyer opines that the sales after the announcement of Ripple’s LH (Liquidity Hub) will be a counter for the Howey Test.
Earlier this week Ripple published a blog post that provided insight into liquidity, the blockchain firm’s B2B crypto liquidity API solution.
The post came nearly two years after Liquidity Hub was initially announced in 2021. At the time, the firm listed six inaugural crypto assets that would be supported by their new product, namely BTC, ETH, LTC, ETC, BCH, and XRP.
The defense for Ripple
The recent blog post by Ripple sparked controversy as crypto fanatics on Twitter started highlighting the fact that XRP was no longer included in the list of supported crypto assets.
Some speculated XRP’s exclusion may indicate Ripple’s anticipation that the crypto would eventually be impossible to operate in the United States jurisdictions with the ongoing legal battle against the Securities and Exchange Commission (SEC).
Others suggested that the firm had reached a settlement agreement with the securities regulator following which XRP was taken off the list.
However, another group of Twitter users took this opportunity to figure out a positive outcome for Ripple.
A crypto sleuth who goes by the name @Leerzeit on Twitter pointed out that Ripple was almost a year into the SEC lawsuit when their Liquidity Hub product was unveiled.
The Twitter account added that even though the announcement stated that XRP would be supported, investors kept pouring their money into XRP to buy the dip.
Meanwhile, crypto lawyer Bill Morgan took to Twitter to share his take on the recent developments. According to him, the fact that investors continued to buy XRP despite the drop in price following the LH announcement, is “great evidence for trial if the matter goes to trial that Ripple products don’t need XRP and the XRPL & XRP can function without Ripple using XRP in all of its particular products.”
This essentially beats two of the four prongs of the controversial Howey Test, which has been cited multiple times by the SEC during the hearings. Morgan believes that the expectation of profit was not there among XRP buyers, which can be used as a defense by Ripple.