A lawyer that's closely followed the SEC's case against Ripple believes XRP is not a security because it does not match the one definition that it could “possibly” fit.
"Instead it argues that the purchase agreement is all that is required — and that is all it proves," Hogan stated.
"But that argument tears the 'investment' from the 'contract' as a simple purchase, without more, [there] cannot be an 'investment contract,' it is just an investment as there is no obligation for Ripple to do anything except transfer the asset," he added.Ripple has long disputed the claim, arguing that it doesn't constitute an investment contract under the— a legal test used to determine if a transaction qualifies as an investment contract.
Hogan further argues that all of the"blue sky" cases, which the Howey case relies on for defining an"investment contract," involved some form of a contract regarding the investment."Indeed, how can a person 'reasonably rely' on an offeror to make them a profit when they have zero legal recourse when that offeror fails to come through?" he said.
"They cannot. Even the oft-quoted four-part test implies that a ‘contract’ of some sort is required." Hogan says the crux of the issue is not whether Ripple used money from the sale of XRP to fund its business, but if the SEC has proven that there was either an implied or explicit"contract" between Ripple and XRP purchasers relating to their"investment."
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