SEC v. Ripple: Jeremy Hogan shows how bad it can get for XRP

Rick Steves

“There has never been a crypto case in which this has happened. So, this would be unchartered waters but the effect of any order would be absolutely devastating.”

The SEC v. Ripple lawsuit is getting tense.

After several winning rounds for Ripple, the SEC is back putting pressure in the form of the motion to compel Ripple to hand over recordings that will support the agency’s case that XRP was marketed as a security.

While the dispute over the recordings continues and the Judge’s decision is still pending, attorney Jeremy Hogan went on Youtube to explore how Ripple can lose the lawsuit and what it means for XRP.

First off, Mr. Hogan pointed to two scenarios that can lead the SEC to victory.

The marketing scenario is like Telegram, which was at the time developing the blockchain project, GRAM. The SEC wants to lead the court to the conclusion that a reasonable purchaser of XRP would expect a profit from Ripple’s continued support of XRP.

The SEC has already found evidence that proves its case. One example provided by attorney Hogan is Ripple’s CTO David Schwartz comment in 2013: “As a corporation, we are legally obligated to maximize shareholder value. With our current business model, that means acting to increase the value and liquidity of XRP.”

“That is one path to victory for the SEC, but it is not the worst-case scenario because the marketing path does not focus on anything inherent to XRP itself, just how it was sold by Ripple.

“This first scenario would be limited to disgorgement damages and perhaps injunctive relief, but could it amount to a finding that XRP is inherently a security?“, the attorney asked.

A similar scenario would be Kin Interactive, which was sued by the SEC for the sale of unregistered securities. The court ordered a fine but didn’t contain a finding that the Kin token was a security.

The firm’s statement in October 2020, said that Kik is going to be OK. “Beyond the monetary fine, Kik’s assets are still Kik’s property, including its remaining treasury, its Kin reserves, and all of its intellectual capital. With this settlement, Kik is able to continue active development on the open-source Kin SDK and their new wallet app, Code”.

Jeremy Hogan raised two questions for the scenario in which Ripple loses the lawsuit.

– Can Ripple continue its business after paying the disgorgement judgment and without potentially being able to sell XRP, except to perhaps accredited investors?

– Will the exchanges feel confident enough to relist XRP?

The second scenario – which disputes the inherent nature of XRP – raises even harder questions. Attorney Jeremy Hogan called it the tidal wave scenario and it hinges on what is currently going on in the litigation with expert discovery.

“The bigger concern is based on the decentralization, or lack thereof, of the XRP ledger. The SEC hasn’t really focused on this argument, probably because it is a losing argument and it doesn’t really mesh with its theory of the case.

“But it is much more dangerous to you”, he continued, stating that the argument here is that XRP is centralized and so reliant on Ripple that makes it a security.

“There has never been a crypto case in which this has happened. So, this would be unchartered waters but the effect of any order would be absolutely devastating. Would have an instantaneous chilling effect on the markets, freezing liquidity, and leaving XRP holders holding the bag”.


The most searched Ripple and XRP stories this week: 

Ripple’s XRP on the spot: Crypto Mom’ points to SEC’s inability to articulate why an asset is a security

SEC v. Ripple: Recordings dispute “not looking good for Ripple”

Ripple’s nearly 30,000 questions could break the SEC’s number one claim

Ripple’s XRP stands to gain with crypto payments adoption at 45% by 2023

SEC v. Ripple: What’s next on the XRP lawsuit agenda?

Ripple running out of time as BIS ‘conspires’ to end cryptos’ threat to financial system

Ripple lawsuit raises hopes as ‘Crypto Mom’ condemns SEC policy

Ripple scores major win as Judge finds out if SEC lied to court

Ripple calls negligence as SEC seeks $1.38 billion from XRP lawsuit

Read this next

Executive Moves

Montenegro approves Do Kwon’s extradition to US

Do Kwon, the former CEO of cryptocurrency startup Terraform Labs, is reportedly facing extradition to the United States to face fraud charges. Kwon has been imprisoned in Montenegro since March, and Montenegro’s Justice Minister Andrej Milovic is expected to make a formal decision on the extradition on December 20.

Institutional FX

Marex seeks US listing following failed UK IPO, eyes $2.8B valuation

London-headquartered commodities broker Marex has kicked off plans for a US listing, opting against a London public float after a failed attempt two years ago.

Retail FX

ThinkMarkets IPO scrapped as SPAC merger falls through

Canada-listed blank check company, FG Acquisition Corp., and Melbourne-based broker ThinkMarkets have jointly decided to call off their previously announced merger plan.

Retail FX

Exness trading volumes slow down in November, dip below $4B mark

FX brokerage powerhouse Exness reported a double-digit decrease in its trading volumes for the month of November 2023 as the market environment stabilised following a period of high volatility.

Executive Moves

iGaming veteran Breon Corcoran replaces June Felix as IG CEO

Spread betting and CFDs broker IG Group plc today announced the appointment of Breon Corcoran, the former chief executive of Paddy Power Betfair, as its new CEO, effective from January 29, 2024.

Retail FX, Reviews

A Guide to Forex Trading and Quotex App Download for PC

Trading in financial markets presents a great opportunity for profit. One of the popular choices nowadays is foreign exchange trading, also called Forex or FXm which involves buying and selling national currencies to make a profit. 

Digital Assets

Tokensoft and Chainwire Form Partnership to Boost Crypto PR Outreach

Through this partnership, Tokensoft leverages Chainwire’s expansive PR platform, enhancing its global reach within the cryptocurrency community and ensuring coverage for its token distribution, claims, and fundraising campaigns.

Digital Assets

No escape for Binance’s CZ: Court blocks travel before sentencing

A federal judge in Seattle has ruled that Chanpeng Zhao, the former CEO of Binance, is not permitted to return to his home in the United Arab Emirates before his sentencing in the United States, set for February.

Digital Assets

FINMA-regulated digital asset provider Taurus expands into Germany

This expansion follows recent moves by BaFin to accelerate the licensing of crypto custody services, aiming to boost market confidence. Following this, several new licenses were issued, notably to Commerzbank, making it the first full-service financial institution in Germany to receive a crypto custody license.