SEC v. Ripple: “Major shift in SEC strategy is admission of defeat” – Attorney Hogan

Rick Steves

“If the SEC truly is going to try and make an argument that the difference between XRP and Ether is that the Ripple ledger is not fully built out – that is a major shift in SEC strategy and major admission of a defeat for the SEC”.

A recent tweet from Fox Business journalist Charles Gasparino has caught the eye of many within the XRP community as the SEC v. Ripple lawsuit lingers.

“SEC Enforcement sources say that the logic of the agency’s case versus Ripple is that the company’s infrastructure is STILL being built out to so XRP – the token which was used to finance the thing – is considered a security while Ethereum has been totally built out for years…”

One legal expert finding this intriguing is attorney Jeremy Hogan, who noticed the recent Ethereum 2.0 Upgrade: “Eth2 is a set of upgrades that improve the scalability, security, and sustainability of Ethereum.”

“So…the upgrade just happened – sounds like the Ethereum network is not “totally built out” after all”, Mr. Hogan said in a video, where he stated that if Gasparino’s SEC source is accurate, “if the SEC truly is going to try and make an argument that the difference between XRP and Ether is that the Ripple ledger is not fully built out – that is a major shift in SEC strategy and major admission of a defeat for the SEC“.

Why did Ethereum get a free pass and Ripple get sued? – Attorney close to XRP publishes memo

“I say that because remember up to this point the SEC has almost desperately been trying to avoid making that comparison. Ever since the April 6 hearing, the judge has assumed that part of the case was going to be comparing Ether, as a non-security, to XRP. And the SEC has gone so far as to backtrack on Hinman’s and the SEC’s guidance as to Ether not being a security, helping Ripple with its Fair Notice defense, in order to avoid this comparison”, Mr. Hogan continued.

Comparing ETH to XRP was unlikely part of the SEC’s gameplan as “not fully built out” is not mentioned anywhere in the SEC’s interrogatory responses that are now public.

The technical argument for the SEC was supposed to only be that the XRP ledger was centralized as can be found in its formal responses under oath in response to interrogatory number 4:

“The Commission avers that certain critical aspects of the XRP ledger were centralized to Ripple between 2012 and 2020, including through Ripple’s control over several aspects of the XRP Ledger, such as the ledger’s maintenance, development, governance, functionality, default trusted nodes list, and consensus mechanism.”

Mr. Hogan’s analysis is that the SEC is now “admitting that what it has tried to avoid for most of this litigation is going to happen – that there will be a comparison between the Ethereum ledger and the XRP ledger”.

“And that is not a place I’d want to be if I was representing the SEC because, and again, I’m not a technical person but even I know that the XRP ledger was made, basically built out in 2013 and has been tweaked and made better since. And the Ethereum ledger was built out in 2015 and has …also been tweaked and made better since. Meaning, there’s no significant difference. So, good luck to the SEC’s experts in coming up with that argument”.

In the meantime, Judge Sarah Netburn denied Ripple’s motion to gain access to the SEC employees’ XRP holdings, but the ruling still seems like a win for the blockchain firm as the SEC was ordered to prove its internal policy against holding XRP.

 

Are you up to date?

SEC v. Ripple: Battle over interrogatories is the “most important”, says top laywer

Why did Ethereum get a free pass and Ripple get sued? – Memo points fingers

Ripple scores win despite losing motion for SEC employees’ XRP holdings

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