John Deaton, the founder of Crypto-Law.US, is criticizing the SEC for not following the law properly. He’s talking about the Ripple case where the SEC didn’t follow the rules.
Maybe the SEC should read Howey again:
“The test is whether the scheme involves an investment of money in a common enterprise with profits to come solely from the efforts of others. If that test be satisfied, it is immaterial whether the enterprise is speculative or… pic.twitter.com/qr1yqyhLRo
— John E Deaton (@JohnEDeaton1) August 28, 2023
Deaton Encourages SEC to Revisit Howey Test
After Australian lawyer Bill Morgan criticized the SEC for saying XRP doesn’t have real worth, Attorney Deaton shared his thoughts.
Morgan said the SEC made this argument in the Ripple case during a stage called summary judgment. He also mentioned that the regulator made the same point in a different request.
In response, Attorney Deaton told the SEC to read the Howey test again. This test decides if something is a security or not. He shared a part of the test which says:
“The test is whether the scheme involves an investment of money in a common enterprise with profits to come solely from the efforts of others. If that test be satisfied, it is immaterial whether the enterprise is speculative or non-speculative or whether there is a sale of property with or without intrinsic value.”
Maybe the SEC should read Howey again:
“The test is whether the scheme involves an investment of money in a common enterprise with profits to come solely from the efforts of others. If that test be satisfied, it is immaterial whether the enterprise is speculative or… pic.twitter.com/qr1yqyhLRo
— John E Deaton (@JohnEDeaton1) August 28, 2023
Did Hinman Provide False Information Under Oath?
Deaton talked about what Bill Hinman said when he was asked questions under oath in the Ripple case. Deaton said that Hinman told the truth that the SEC doesn’t need to prove all parts of the Howey test to show something is an investment contract.
Deaton gave two reasons why Hinman might have said this. First, he thought Hinman might have said this because he wasn’t qualified or skilled enough for his job at the SEC’s Corporation of Finance.
Second, Deaton thought Hinman might have lied under oath. Deaton thinks this because Hinman seems too qualified to say the SEC doesn’t need all Howey test parts to prove something is an investment contract.
Deaton pointed out that Hinman was in charge of the Alibaba IPO in 2014. So, he must be skilled.
Deaton also talked about a part of Hinman’s statement where he said he never talked about his important speech from June 14, 2018.
The @SECGov, like many federal agencies, has lost complete sight of its mission and purpose. It literally ignores the law. Digital assets and the Ripple XRP case are the perfect examples.
Bill Hinman testified UNDER OATH that the SEC does not have to satisfy all Howey factors to… https://t.co/8sEDNiuaOy
— John E Deaton (@JohnEDeaton1) August 28, 2023
But the papers with the speech drafts showed that Hinman talked to Vitalik Buterin, who helped start Ethereum, a week before he said those things. This made some people think that Buterin might have influenced Hinman to say that Ethereum isn’t a security.
Important:Â Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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