Former U.S. Defense Lawyer Interprets SEC’s Recent Argument Against Ripple

James K. Filan said the SEC wants the judgment in the Ripple case to incorporate XRP secondary market sales.

Following the official filing of motions for summary judgment, several legal experts have taken the time to shed more light on the motions filed separately by Ripple and the Securities and Exchange Commission (SEC).

As reported by TheCryptoBasic today, attorney John Deaton, the lawyer representing over 72,000 XRP holders in a lawsuit against the SEC, analyzed Ripple’s argument in the recently-filed summary judgment motion.

James K. Filan, a former U.S. defense lawyer, also took out time to summarize the Securities and Exchange Commission’s argument in the motion.

Filan’s Analysis

#XRPCommunity #XRP 1/3 Here’s the SEC’s argument, as I interpret it.

“We aren’t saying XRP is a security per se. What we are saying is that any purchase of XRP, as a matter of economic reality, is an investment in a common enterprise with other XRP holders and with Ripple.

— James K. Filan 🇺🇸🇮🇪 114k (beware of imposters) (@FilanLaw) September 24, 2022

Filan cited some excerpts of the SEC’s summary judgment motion, where the agency did not directly imply that XRP is a security. However, the agency suggests that any XRP purchase based on economic reality is an investment in a common enterprise with Ripple and other XRP holders.

“Whether it’s through horizontal commonality or strict vertical commonality, it is an investment in a common enterprise with other XRP holders and with Ripple. So while XRP may not be a security per se, there’s no other possible way to offer or sell XRP EXCEPT as a security,” Filan shared in a tweet.

Summarizing the SEC’s argument, Filan said the agency wants a ruling that will incorporate all XRP secondary sales, irrespective of other considerations.

“[…] And when you realize what the SEC is saying, no matter how it is framed, the judgment that the SEC wants incorporates secondary sales,” Filan concluded.

Deaton Dismisses XRP Secondary Market Sales Claim

Recall that the SEC had hired an expert who would ascertain what XRP holders relied on while purchasing the asset class. However, attorney Deaton said the SEC halted the plan after he and other concerned XRP investors acted. He added that the argument was the only “Hail Mary” the agency had at proving secondary market XRP are security.

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