1/19 Lawyer Jeremy Hogan (Legal Briefs) discusses the SEC/Ripple lawsuit.

Detailed summary follows.

TL/DR: SEC isn't asking for XRP to be deemed a security, will likely settle, and the court has the power to stop Ripple from selling any more XRP.

2/19 On Jan 1, @JohnEDeaton1 filed a writ of mandamus against the SEC that was "extraordinarily well done". Writ is asking a superior court to tell a lower court to do something correctly, but is rarely granted. Petitioners also want court to order XRP "not a security".
3/19 While it's a difficult argument to make that XRP is a security, Hogan doesn't think the petition will be granted (watch the video for all the reasons why).
4/19 However, he believes a damages lawsuit against the SEC is also coming, but under US law you have to first make a claim with the SEC and give them 6 months to respond before suing them, so he expects that lawsuit to drop in June.
5/19 Hogan also thinks the petition is great even though it's going to lose, because it lets the case be made twice before the court, and who knows? Maybe the court will grant the writ of mandamus.
6/19 CoinBase getting sued in San Francisco for commissions paid on the purchase of XRP. Hogan expects many such lawsuits going forward. Corporate counsel will always be conservative, erring on the side of caution.
7/19 Regarding halting of XRP trading by exchanges, Hogan says it's better to lose some commission from the halt than get sued for malpractice if an exchange keeps trading and is wrong, so exchanges are being conservative.
8/19 This SEC lawsuit will not grant clarity for XRP. Quote, "The reason why there is not even a proposed rule from the SEC on crypto is because the SEC knows that there is no way they can make the bright line rule" (a clearly defined rule w/little room for interpretation)...
9/19 "It's not even legally possible really because the second hat that the SEC wears is to enforce the laws on security. Those laws were passed by Congress a long time ago and the SEC has no discretion but to enforce them...
10/19 "I don't believe the Ripple litigation will end with a dismissal of the case and formation of an administrative rule because those are two completely separate functions of the SEC." Whether a coin is a security is a legal issue that will depend on the facts of each case.
11/19 If the judge/jury finds that certain aspects of how Ripple dealt with XRP back in 2013 meet the Howey test and those sales were securities, future courts could find that similar ICOs were also sales of securities. The same issues don't have to be re-litigated.
12/19 This is good for XRP! In the lawsuit, the primary ask is that Ripple stop selling XRP. The SEC also wants Ripple to give back the money made by the sale of the XRP to the buyers and is seeking a monetary penalty against Ripple.
13/19 Under Federal law, you can request a Declaratory Judgement, which asks for an order clarifying something (in this case, possibly, a declaration that the XRP is a security and not a currency), but there is no request for such judgement in the lawsuit against Ripple.
14/19 A judge can't grant something that isn't asked for in the suit. The omission for the request of a Declaratory Judgement means the SEC is not trying to get XRP deemed a security. The effect of a verdict in this case will have almost no effect whatsoever on XRP.
15/19 Ripple would be smart to want a settlement. A trial/verdict is unlikely. In SEC versus Paragon (where Paragon didn't put up much a fight) a settlement was reached that required:
16/19

1. Profits were paid back to buyers of the coin
2. Paragon was to cease violating the law
3. Payment of penalties of $250,000
4. No Declaratory Judgement regarding the security/currency status of Paragon Coin
17/19 What affect would a settlement like Paragon's have on Ripple and XRP? Hogan says he's not qualified to answer that question. Since the SEC's suit and its probable outcome aren't that bad, why did XRP drop by 50%? Hogan poses the question but doesn't answer it.
18/19 Ripple holds almost 60% of XRP in escrow. It's within the court's power to order that Ripple not be allowed to release any more XRP from escrow at all.
19/19 What would happen to XRP if the current circulating XRP is all that will ever exist? If he gets a good answer, he'll "probably start buying XRP tomorrow".
SUMMARY: SEC isn't asking XRP to be deemed a security, will likely settle, and the court has the power to stop Ripple from selling any more XRP. This lawsuit isn't that bad, shouldn't have affected XRP's price so much and isn't likely to have much of a long-term effect on XRP.

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12 Jan
1/17 Is XRP a store of value asset?

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