Pro-XRP attorney bashes the SEC, deems its regulatory approach on Ripple as an “unconstitutional shortcut”

Ripple proponent attorney John Deaton argues that the underlying asset is immaterial when determining if a contract, transaction or scheme constitutes an investment contract.
Deaton argues that each secondary sale transaction of XRP needs to be examined separately, similar to the SEC’s case against LBRY Inc.
XRP price is currently consolidating below the $0.50 level.

Ekta Mourya FXStreet

Attorney John Deaton noted in a recent tweet that the XRP’s status as a security has no material impact on the Securities and Exchange Commission (SEC) v. Ripple lawsuit. The legal expert drew similarities between the SEC’s case against payment giant Ripple and LBRY Inc.

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Ripple proponent attorney’s take on XRP token’s status as a security

The US financial regulator Securities and Exchange Commission’s lawsuit against Ripple has dragged on for over two years now. Ripple proponent, attorney John Deaton, recently debated Marc Fagel on XRP’s status as an investment contract or security and its impact on the SEC’s lawsuit against Ripple.

Deaton recently summarized the debate for his Twitter followers, emphasizing the fact that there has not been an investment contract case in 76 years that held the underlying asset itself to be a security.

I’ve stated two things (including in my amicus brief):

1) there hasn’t been an investment contract case in 76 years that held the underlying asset itself to be a security; https://t.co/4SZFSnvIVy
— John E Deaton (@JohnEDeaton1) May 7, 2023

The pro-Ripple lawyer explained that just as seen in the SEC’s lawsuit against LBRY Inc., the secondary market transactions involving XRP need to be evaluated separately from the primary sales of the asset by Ripple.

Deaton stated the SEC is taking an unconstitutional shortcut as they focus on the underlying asset and not the circumstances surrounding the offer and the sale of the tokens. He underscored that the asset is immaterial to define if a contract or transaction constitutes an investment.

This shorthand approach is, in other words, a shortcut. Not only is it an intellectually lazy shortcut, it’s an unconstitutional shortcut that alleviates the need for the SEC to do its job and analyze the facts and circumstances AT THE TIME of the transaction.
— John E Deaton (@JohnEDeaton1) May 7, 2023

The XRP community of holders are closely watching the SEC lawsuit for price impact on the altcoin. Lawsuit updates shared by attorney Deaton have influenced XRP price throughout the SEC v Ripple legal battle.

XRP price consolidates below $0.50

XRP price is currently consolidating below the $0.50 level, trading below two significant Exponential Moving Averages, 10-day and 50-day EMAs at $0.4582 and $0.4650, respectively.

XRP outlook is tilted to the upside but the altcoin faces immediate resistance at $0.5237 and $0.5855, with the latter capping XRP’s advances for a year now. In the event of decline XRP could find support at $0.4111, a level that acted as resistance from December 2022 to March 2023.

XRP/USD daily price chart

If XRP price nosedives below support at $0.4111 it could invalidate the bullish thesis for the altcoin.

Author

Ekta Mourya

FXStreet

Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.