Legal expert Bryan Jacoutot has expressed concerns about the recent ruling in the U.S. Securities and Exchange Commission (SEC) v. Ripple case, stating that it “rests on very shaky ground.” Jacoutot, an attorney at Election Law Group and Taylor English Duma, believes that Ripple’s victory may be short-lived as he claims the judge “got the law wrong.”
According to Jacoutot, the court ruled that Ripple’s sale of XRP to institutional investors constituted an unlawful security sale. He predicts that Ripple will likely be required to return the funds received from these sales, alongside paying penalties and fines. However, he notes that in the context of the programmatic sale of XRP to random individuals, the court found that XRP did not qualify as an investment contract under Howey and was therefore not considered a security.
Jacoutot raises doubts about the court’s reasoning, particularly regarding buyers’ lack of knowledge about whether XRP came directly from Ripple. He argues that according to Howey’s criteria, it is only relevant whether buyers expected profit based on Ripple’s efforts – which he believes they did since people expected XRP to increase in value.
The lawyer also points out potential implications for Ethereum. Despite some suggesting that this ruling could clear the path for Ethereum Foundation if upheld, Jacoutot cautions against such assumptions due to significant distinctions in how Ripple and Ethereum sold their respective tokens. Specifically, he highlights how everyone knew they were buying from Ethereum Foundation during its pre-sale and mentions that ETH purchased during this period was subject to a lockup period – factors that made it more likely for institutional investors to consider XRP a security.
While acknowledging Ripple’s win and support from XRP enthusiasts, Jacoutot warns that it may be short-lived. He questions whether the judge correctly interpreted the law but emphasizes that even if she did not make an error, numerous projects including Ethereum could still face legal consequences. He concludes by stating that the court’s ruling has left many other challenging securities questions unanswered.
Lawyer Bryan Jacoutot believes that the district court’s ruling on XRP in the SEC v. Ripple case is based on weak grounds and expects an appeal. He highlights the court’s determination of XRP sales to institutional investors as unlawful while dismissing XRP’s status as security in programmatic sales to random individuals. Jacoutot also raises concerns about potential implications for Ethereum due to distinctions between Ripple and Ethereum’s token sales methods. Ultimately, he suggests that Ripple’s victory may be short-lived and expresses doubts about the judge’s interpretation of the law, leaving many projects vulnerable to securities-related uncertainties.