Investing.com – The Securities and Exchange Commission’s (SEC) lawsuit recently took a new turn, and attorney John E. Deaton told Fox Business that the SEC is likely to lose the case.
According to him, the fact that the SEC wants to ensure that the XRP token itself is considered a security is a mistake, because it does not correspond to the usual approach, as Deaton explains:
“When acting against a promoter, it is generally said that he made an unrecorded offer or sale of securities on a particular date and that particular transaction was a contract for the investment in securities. But currently, the argument is that all sales of XRP – the token itself – are securities and that is the problem.”
According to Deaton, the SEC also failed in this regard in the LBRY lawsuit. In the summary judgment, the judge declared that the initial sales of LBC tokens were unregistered securities offerings. However, he explicitly clarified that this did not apply to sales on the secondary market.
If the supervisory authority does not lose in the current Ripple case, it would, according to Deaton, have significant consequences for the entire cryptocurrency industry. The foundation of the business of cryptocurrency exchanges like Coinbase (NASDAQ:) and Binance would then be tested, as they would be platforms on which unregistered securities are traded.
From the perspective of the securities supervisory authority, users acquire XRP solely for the purpose of earning profits based on Ripple transactions. To do this, an expert was specially hired to explain to the court the decision-making regarding the purchase of XRP. This approach, however, was apparently so far-fetched that the court excluded the expert testimony from the judgment at the request of Ripple’s defense. Deaton said of this:
“The victory we got was that the SEC brought in an expert to testify what XRP holders think when buying XRP. Of course, he never interviewed a single XRP holder during his entire career. Instead, he received a three million dollar contract from the SEC to act as an expert, and the judge therefore excluded this part of the testimony, which will therefore not be allowed.
In recent days, the SEC has suffered defeats on different battlefields (Ripple, Voyager-Binance, Grayscale), which is why John Deaton did not fail to put his finger in the wound once again.
In a tweet, he referenced two documented statements by federal judges in the context of the Ripple lawsuit, which cast doubt on the SEC’s understanding of the law. In a written ruling, a judge said “SEC attorneys are hypocrites and disloyalty to the law.” Another day, a judge commented that “SEC attorneys were more interested in advancing their own agenda than upholding the law.”
Ripple: technical benchmarks
Ripple is currently gaining 2.95 percent at $0.39479, while on a weekly basis it is up 3.68 percent.
The cryptocurrency managed to overcome the resistance of the 38.2 percent Fibo retracement of $0.3875 yesterday based on the daily closing price. Previously, the psychological mark of $0.4000 was tested, as today’s high could have been formed at $0.4004.
As long as trading is taking place above the 38.2 percent Fibo retracement, expect a retest of the psychological mark. If one manages to sustainably break above this level and the 23.6 percent fibo retracement of $0.4045, then attention will shift to the January 23rd high, which sits at $0.4320.
However, if the downside pressure builds and price breaks below the 38.2% Fibo retracement, the likelihood of a test of the 50% Fibo retracement at $0.3737 increases. Below that, the next support will be the 61.8% Fibo retracement at $0.3600.
By Marco Oehrl