- Former SEC Executive thinks that Ripple Lab could win its case against the financial regulator.
- Lack of clarity affects the crypto and blockchain industry of the country.
A one time top executive of the Securities and Exchange Commission (SEC), Joseph Hall, has indicated that the financial regulator could lose its case against crypto payment company, Ripple Labs. He made this statement in a recent interview with “Thinking Crypto” where he stated his astonishment about the lawsuit.
Lack of clarity affects blockchain development
Hall, who once served as the Managing Executive for Policy under Chairman Donaldson between 2003 and 2005, believes that the attempt by the SEC to enforce actions against Ripple is proof that the crypto space needs more regulatory clarity.
According to him, the commission’s Howey test is no longer in tune with the realities of today as it cannot properly determine if a digital asset is a security. In his words, he noted that the test does not properly explain what a security is and went on to assert in his words, “Imagine trying to explain what an iPhone is in a language your great-grandfather would have understood just after World War II. That’s how easy it is to predict which digital assets are securities under the postwar Howey test.”
This lack of clarity affects the development of the blockchain and crypto industry in the United States. He further stated that investors would be unwilling to invest in a space where they are not sure enjoy the support of the law.
Hall’s view on Ripple Lab Vs SEC
Joseph Hall stated that Ripple Lab could get the same treatment Ethereum got in 2018 when William Hinman made a speech that the second-largest digital asset “might have been born a security but it has now morphed into a nonsecurity.”
Hall pointed to the fact that this could also be applied to Ripple Lab’s token saying that “maybe there were some issues with early sales of XRP” but presently, he believes the asset is currently “in the clear.” He also noted that the litigation could result in “heavy losses for investors” because of the current huge market cap of the asset.
He concluded by saying that any judge looking at the case might ask the SEC why it is just complaining about the XRP sales now since the token had been in sale since 2012.