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U.S. Securities and Exchange Commission (SEC) added more digital assets to its list of “securities”, lately. However, the XRP holders’ lawyer came has alarmed crypto supporters and Congress over the SEC’s unlawful expansion of the Howey Test in the due time.
Will SEC expand the test?
John Deaton, XRP holders’ lawyer in the SEC Vs Ripple lawsuit said that Crypto traders need to be aware of the commission’s recent activities. He mentioned the latest argument made by the commissions in the summary judgment against the LBRY.
He claims that SEC chair Gary Gensler is unlawfully trying to expand the law.
WatchDog’s lawyer stated that even if someone buys a token to use it. Objectively it can be said that the buyer also expects a profit and it can be considered a security. Deaton highlighted that the judge will issue its ruling within the next few months.
XPP lawyer draws attention to over SEC’s claims over the XRP token in the Ripple Lawsuit. He stated that the commission claims that XRP embodies all of Ripple’s efforts. However, the token itself is representing the investment contract with the firm. This also includes the secondary market.
What if this argument gets approved?
Deaton asserted that crypto traders can get into danger if this argument gets the green light from the court. As this will imply that simply owning an asset can lead them into the common enterprise.
According to the argument, SEC implicated that the utility of the asset will not matter. Even if a buyer with the full intention of consumption buys an asset then it can be stated that he/she expects the price surge of a security.
As per Deaton, the SEC lawyer even mentions that the other prong does not have to be link with the promoters. The commission is aware of the fact that crypto investors can stake their assets independently of the promoters.
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