- Pro-XRP lawyer said there are no precedents for determining whether a crypto sale constitutes an investment contract.
- The lawyer’s conclusion was based on extensive research and expert studies.
- However, some lawyers are unsure how the Judge can decide whether Ripple sold XRP as a security.
In a series of tweets on Sunday, the pro-Ripple blockchain lawyer, John Deaton, argued that there are no precedents for determining whether a crypto sale constitutes an investment contract.
With respect to the ongoing case between Ripple and the U.S. Securities and Exchange Commission (SEC), Deaton pointed out that no investment contract cases in 76 years have held the underlying asset itself to be a security.
The attorney reached this conclusion after personally conducting extensive research on the subject and relying on the studies of other experts like Lewis Cohen. Cohen, a New York-based lawyer, recently published a book titled “The Ineluctable Modality of Security Law: Why Fungible Crypto Assets Are Not Securities.”
Furthermore, Deaton claimed that there had been no cases where an investment contract was found when there existed zero privity between the buyer and the promoter of the asset. He also expressed that whether a crypto sale constitutes an investment contract is determined by the circumstances surrounding the transaction, including the parties involved.
However, crypto lawyer Bill Morgan took the conversation thread further. Morgan pointed out that Judge Analisa Torres made it clear in the Daubert motion decision that the issue she must decide is whether Ripple sold XRP as a security despite the SEC taking broader positions suggesting any sale of XRP was an investment contract.
Also, Morgan expressed confusion over how Judge Torres can permit or exclude evidence on the issue in which some of the expert evidence she did not permit may be relevant.
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