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Ripple: SEC’s Summary Judgment Motion Unlikely To Be Granted, Says Lawyer

7 Nov, 20223 min readRegulation
Ripple: SEC’s Summary Judgment Motion Unlikely To Be Granted, Says Lawyer

The XRP community’s fan-favorite lawyer Jeremy Hogan has once again commented via Twitter on the current state of the court case between Ripple Labs and the US Securities and Exchange Commission (SEC).

Hogan cited attorney John E Deaton, who represents over 75,000 XRP investors in the litigation. After Judge Torres denied Deaton’s motion to intervene, she allowed the filing of amicus briefs.

As a result, Deaton filed his amicus brief for all XRP investors last week. Of Deaton’s group, more than 3,000 took the opportunity to file an affidavit.

Ripple Vs. SEC: Why A Summary Judgment Isn’t Very Likely To Happen

According to Hogan, the SEC will not be able to meet its burden of proof “on at least one element of the Howey test.” This is where Deaton and the XRP investors who have made their voices heard in court and play a crucial role.

As Hogan went on to discuss, the SEC must do two things in order for the summary judgment motion to succeed. First, it must “prove every element by the greater weight of the evidence AND prove that there is no genuine dispute of a material fact”.

However, this factual argument is built on very shaky ground. Specifically, the argument is that XRP investors bought into the token based on Ripple’s promise of a higher price.

The SEC is relying solely on a few statements from the tech-company and a handful of buyers. Its own expert on the subject has let the SEC down.

As Deaton wrote, the SEC’s original intent was to rely on the “mere speculation” of a purported expert who failed to interview a single XRP holder before forming his opinion.

The SEC offers no evidence related to knowledge or conduct attributable to amici or any XRP holders. […] SEC expert admitted that he “might have come to a different conclusion” upon learning that XRP holders acquired XRP for non-investment purposes.

Further, the attorney argues that in the complaint entire sections were devoted to XRP buyers. However, on their motion for summary judgment, the SEC avoids any testimony on XRP holders. “It avoids such evidence because it destroys the false narrative presented by the SEC,” Deaton says.

Ripple counters the SEC with its own expert witness correlating XRP price trends with market forces, especially since 2018. In addition, the company now has 3,000 affidavits from Deaton and XRP holders who did not buy XRP because of Ripple.

Hogan therefore concludes that the SEC has failed to meet its burden of proof over the past nearly two years.

A handful of statements over 8 years vs. expert opinions and 3k affidavits. BUT, even putting that aside, is there a genuine issue of material fact here? Ripple has submitted direct, hard evidence that a reasonable XRP purchaser was not relying on Ripple to increase price. I don’t see how the Judge ignores that evidence and grants summary judgment on this prong of the test. Not saying the SEC can’t win – but it can’t win here.

In the 1-day-chart the XRP price is currently experiencing a signal for a trend change. The 100-day SMA line is crossing the 200-day SMA line from the bottom to the top, indicating the potential for a new uptrend.

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