D-Day for SEC v. Ripple: Legal advice on whether XRP is a security unsealed

Rick Steves

February 17 was yesterday: we have covered the news in two articles. Links below.

The SEC v. Ripple lawsuit has had two major updates yesterday. 

Ripple revealed a piece of advice given by law firm Perkins Coie LLP as the defendants seek full disclosure of the legal memos “so that the public can review the SEC’s characterizations of those documents in their full context”.

The SEC explicitly said Hinman’s speech was public guidance as it tries to put those drafts and related notes back in the DPP box. This is a turn of events as for many months, the agency denied Ripple the opportunity to analyze the speech in its defense by claiming it was onlyl a personal opinion.

Outdated piece

Two weeks ago, Judge Analisa Torres ordered Ripple to unseal documents pertaining to legal advice it received regarding the regulatory standing of XRP tokens.

The unsealing of those notes is scheduled for today, February 17, and they may help determine the outcome of the SEC v. Ripple lawsuit.

XRP utility won’t mean much if Ripple was advised to register with the SEC

Ripple’s fourth affirmative defense, which claims the SEC failed to provide fair notice that XRP could be considered a security according to the regulatory framework, could be in trouble if past legal advice pointed to near certainty that the SEC would come knocking at the door if the firm didn’t register with the agency and that the Howie Test and its four criteria were clear enough even for the digital asset.

The abovementioned legal advice was sought by Chris Larsen back in 2012. The law firm submitted two memos in which it had analyzed all the legal scenarios stemming from the issuance and sale of XRP.

Throughout the lawsuit, the SEC claimed Ripple and its executives were advised to treat XRP as a security but chose to proceed with the fundraiser, which began in 2013, “through the sale of digital assets known as XRP in an unregistered securities offering to investors in the U.S. and worldwide”, as per the complaint.

The argument of utility would likely lose its strength if the court does find out that Ripple knew that XRP was a digital asset security, according to the legal advice it obtained in 2012.

Attorney Jeremy Hogan says SEC’s strategy is the right one

Attorney Jeremy Hogan, partner at Florida-based Hogan & Hogan law firm, was asked how he would play the SEC’s cards and he “agreed” with the strategy.

“They don’t have a bad strategy right now. They’re trying to frame it in the exact same way Judge Torres has seen before, making it really simple”, he said.

The plaintiff’s “simple” strategy consists of gathering all the evidence, going to the judge, and say “when these people bought XRP, the only use cases were something that Ripple had developed. So, they were looking at ripple to increase the value of XRP”, Hogan explained, adding that the SEC is also trying to downplay the fair notice defense.

“We’ve had the Howie test since 1934 with its clear four criteria. There’s no reason Ripple couldn’t have read these tests back in 2013”, Jeremy Hogan hypothetically argued on behalf of the SEC.

“We’re not required to go to every company and explain the laws. It’s impossible to do so”, he continued, adding that the SEC is keeping the section 5 violation simple. “They’re absolutely looking at Ripple for profit”.

“I don’t have to explain to them whether they are in violation of the law. I’m the regulator. I’m the police. if someone breaks the law, I arrest them and take them to jail. That’s gonna be the SEC position”.

Attorney Hogan said that will 100% be how they approach the case, although it is unknown how much evidence the plaintiff has to support its claims.

The next question would be if Ripple doesn’t win, then what will be the future of XRP?

BREAKING: Ripple legal advice on XRP revealed, including “do not sell coins”

Read this next

Digital Assets

Valkyrie pulls back on Ether futures merge with Bitcoin ETF

Valkyrie Funds LLC will suspend the purchase of Ether (ETH) futures contracts for its Valkyrie Bitcoin and Ether Strategy ETF (BTF.O). Additionally, the firm will unwind any positions in Ethereum that it has already acquired.  

Digital Assets

Hong Kong police arrest 18 in $1.5B billion JPEX fraud

The investigation into the JPEX crypto exchange scandal continues to unfold as Hong Kong and Macau police arrest four more individuals. These arrests, which include individuals considered “relatively close to the core” of the scandal, bring the total number of detentions to 18.

Digital Assets

Gemini tells Dutch users to withdraw assets by November 17

Gemini, the cryptocurrency exchange founded by Cameron and Tyler Winklevoss, announced that it will cease providing services to customers in the Netherlands, citing regulatory requirements imposed by the country’s central bank.

Digital Assets

SEC puts BlackRock, Valkyrie, and Bitwise Bitcoin ETFs on hold

The U.S. Securities and Exchange Commission has delayed its decisions on several bitcoin exchange-traded fund (ETF) proposals, leaving many in the crypto industry feeling pessimistic for any future blessing from the agency.

Digital Assets

Ripple backs out of Fortress Trust acquisition

Ripple has decided to cancel its planned acquisition of Fortress Trust, a custodian company, less than a month after initially announcing the agreement.


France regulators blacklists 21 FX brokers, FuturBTC

France’s financial markets regulator, the Autorité des Marchés Financiers (AMF), today shed light on several unregulated forex brokers representing their offering under several brands. Notably, the AMF has identified only one crypto-assets provider in its latest warning.  

Digital Assets

Flare and Arkham Collaborate for Enhanced Decentralized Data Access

Flare’s blockchain for decentralized data acquisition integrates with Arkham’s Intelligence Platform, offering users advanced analytics and actionable on-chain insights.

Industry News

iFX EXPO International 2023 Successfully Concludes

The most talked about financial event of the year took place in Limassol, Cyprus.

Retail FX

Plus500 Forex Garners Market Attention In The Latest Expert Ranking

Securing the 58th spot in Traders Union’s Best Forex Brokers of 2023 ranking, Plus500, despite its cautionary overall score of 6.3 out of 10, stands out for its stringent regulatory compliance, user-centric WebTrader platform, and a commendable focus on account security, though it lags in providing advanced trading tools and trust management features.