As the Ripple-SEC legal fracas reaches its climax, a lawyer with a pro-XRP bent, Jeremy Hogan, has taken to Twitter to argue that XRP is not a security.
In a Twitter thread from April 9, Hogan shared a document on the platform that underscores the statutory definition of a security, which, according to him, shows that XRP fits only under the “investment contract” rubric but isn’t a security.
Hogan stated that the legal criteria for being classified as an investment contract are usually governed by the Howey case and its “progeny.”
He noted that although the Howey case did not explicitly examine the “contract” component of an “investment contract,” it proceeded under the presumption that one was necessary because it was reacting to a lower court’s judgment.
Hogan also cited the Joiner case, which demonstrated the presence of a contract between the offeror and the purchaser.
No proof of investment contract in Ripple case
However, the pro-XRP attorney noted that the SEC has failed to provide sufficient facts that prove a contract of investment in the Ripple case.
The XRP-friendly lawyer argued that a mere purchase, without additional obligations, cannot constitute an “investment contract” since Ripple has no obligation to do anything except transfer the asset.
Hogan maintained that a contract regarding investment is present in all cases referenced in the Howey case. He added that it is not logical for investors to depend on an offeror to generate a profit because they have no legal recourse if the offeror fails to deliver.
Hogan emphasized that the central issue in the case is not whether Ripple used money from its XRP sales to fund its business but rather that the SEC has yet to demonstrate an explicit contract between the blockchain firm and XRP purchasers regarding their investments.
It’s worth noting that Hogan’s legal analysis is meant to provide research materials to the clerk aiding Judge Analisa Torres in drafting the case’s summary judgment.
The Ripple-SEC lawsuit, which kicked off in December 2020, hinges on the SEC’s accusations that Ripple and its executives executed an unregistered securities offering worth $1.3 billion using XRP.