Attorney John E. Deaton, through a recent statement, reaffirmed his conviction that the SEC is not acting in line with the law but rather to strengthen its control over the expanding market.
He believes this to be the case since the SEC’s primary objective is to increase its hold on the rising market. As a result, he went to great lengths on the Howey test and how it is used by the SEC.
In a tweet published today, Deaton explained the SEC’s reasoning for a summary judgment against Ripple. According to him, the defendants do not contest that they offered and sold XRP in return for money,’ which is sufficient evidence to prove the investment of money part of the Howey test.
Per Deaton, every XRP exchanged on the secondary market comprises securities, which is true regardless of who the seller was or the circumstances surrounding the transaction. He continued by saying that the SEC bypasses the study and instead asserts that XRP, the token, is a replacement for the business.
He also explained that the purpose of the escrow account was to remind investors of the communal enterprise that XRP stood for. As a result, XRP is used to denote the collective endeavor in this context.
Deaton demonstrated why the test used by the SEC needs to be fixed. The regulator believes that any purchase of XRP immediately satisfies all three prongs of the Howey test since XRP stands for everyday business and investment contracts.
On a separate point, some people believe that the Howey test is more helpful in determining whether or not to pursue instances of fraud than when it is used to determine whether or not to register crypto assets as per the attorney. However, as Deaton pointed out to the SEC, he said that the Howey test is not used in this manner, and this situation does not serve as an instance of how the law operates.
Even if some despise Ripple and believe that XRP was sold as a security, Deaton thinks the SEC’s reasoning would establish a dangerous precedent if it were correct.