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The US Securities and Exchange Commission (SEC) recently added more digital assets to its “securities” list. XRP Holders Advocate Warns Crypto Supporters of Trouble Over SEC’s Illegal Extension of the Howie Test.
Will the SEC expand the test?
John Deaton, an attorney for XRP holders in the SEC lawsuit against Ripple, said crypto traders should be aware of the Commission’s latest actions. He mentioned the latest argument put forward by the SEC in another case against LBRY, another crypto company.
He claims that SEC Chairman Gary Gensler is illegally trying to expand the law.
The SEC lawyer stated that even if someone buys the token, they will be able to use it. Objectively, we can say that the buyer also counts on profit and it can be considered a security. Deaton stressed that the judge will make his decision within the next few months.
XPP lawyer draws attention to SEC claims against XRP token in Ripple lawsuit. He stated that the commission claims that XRP embodies all the efforts of Ripple, and the token itself “represents an investment contract with Ripple,” including in the secondary market.
What if this argument is approved?
Deaton argues that crypto traders could be at risk if this argument gets a green light from the court. Because that would mean that simply owning the asset could lead them to a “common venture” – such a term is used in the definition of an investment contract.
According to the argument, the SEC implies that the usefulness of an asset will not matter. Even if a buyer with the full intention of consumption buys an asset, it can be stated that he expects a jump in its price as from a security.
According to Deaton, the SEC lawyer even mentions that the other party doesn’t have to be connected to the organizers.
#Expanding #Howey #test #illegal #Congress
