fxs_header_sponsor_anchor

Ripple Chief Legal Officer cites case from the 70s, argues SEC knows XRP is not a security

  • Ripple Chief Legal Officer Stuart Alderoty discusses Andy Warhol’s lithograph case to support the thesis that XRP is not a security. 
  • Alderoty argues that art lithographs, even when sold for investment, were not considered securities by the SEC. 
  • Alderoty’s views support the thesis of Ripple’s win in the US financial regulator’s lawsuit against the payment firm. 

Stuart Alderoty, General Counsel and Chief Legal Officer (CLO) at Ripple, recently cited a Supreme Court verdict on Andy Warhol’s lithograph case to support his argument that “XRP is not a security.” According to Alderoty, the US financial regulator is well aware of the case, and this likely flips the outcome in payment giant Ripple’s favor. 

Also read: XRP price likely to suffer a setback as Ripple bulls rethink strategy

Ripple’s CLO cites Andy Warhol’s lithograph case to strengthen Ripple’s argument

The prolonged legal battle between the US financial regulator, Securities and Exchange Commission (SEC), and remittance firm Ripple continues as the community looks up to the payment giant’s CLO for answers. 

Alderoty reminded the community that as of May 19, the Supreme Court made it clear that facts from old cases do not apply mechanically. The party citing a fact from a prior case needs to adapt it to the new world, taking the underlying statute and the “soil” of the common law that comes with it. 

Ripple’s Chief Legal Officer said that the company's argument that the Howey test (that determines whether an asset is a security) carries the “soil” of common law in which an “investment contract” requires a contract for an investment that creates post-sale rights for the purchaser and obligations on the seller. 

In the case of XRP Ledger’s native token XRP, there was no obligation on the seller to drive the value of the altcoin higher, post its sale. Alderoty believes this argument is sufficient and draws inspiration from Andy Warhol’s lithograph case from the 70s.

In the 1976 Supreme Court case, the SEC said that “art lithographs - even when sold for investment - are not securities when there are no post sale contractual obligations from the seller in favor of the buyer?”

Does the SEC know XRP is not a security?

Alderoty’s example raises the question of whether the US financial regulator is aware that XRP does not qualify as a security. In case the answer is affirmative, it strengthens Ripple’s defense against the SEC and fuels a bullish thesis for a positive outcome for the cross-border payment remittance firm. 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.


RELATED CONTENT

Loading ...



Copyright © 2024 FOREXSTREET S.L., All rights reserved.