In the ongoing litigation between the SEC and Ripple, further complaints have been submitted as the SEC continues to prove its thoroughness in the scrutiny. The Securities and Exchange Commission (SEC) accuses Ripple of engaging in a variety of unethical business practices, including running the Howey test for a variety of assets (UST, LUNA, and wLUNA), and also asserting that mAssets are securities-based swaps as on the other hand, it presses to fight stablecoins.
whew lad, lots to digest in the SEC lawsuit vs Do Kwon and Terraform Labs
right off the bat, a very interesting fact is that the SEC is being more thorough than usual–specifically running through the Howey test for various assets (UST, LUNA, and wLUNA) and also alleging that… pic.twitter.com/qHuL6mKpeo
— _gabrielShapir0 (@lex_node) February 16, 2023
In the UST case, the SEC provides an alternative, non-Howey-based argument, that UST users have “rights to subscribe” to security (LUNA) and thus are themselves securities. This is an “enumerated security” type of argument that does not rely on the Howey test according to experts.
Additionally, not using the Howey test for a token, and instead using another type of “enumerated security” was also among the complaints. It is important to note that experts expect the argument for UST being security to be a roadmap for how the SEC goes after other stablecoins
They will allege that integration, promotion, marketing, commercial deals, etc building the stablecoin ecosystems are “efforts of others” that are “reasonably expected” and can lead to profits in connection with the stables. Additionally, stables might even pass the Howey test despite them being “stable.”
Fobes pulls down the controversial article
On the same note, Defense attorney James Filan tweeted on February 16 that media personality and Forbes senior writer Roslyn Layton had filed a petition to acquire the confidential Hinman speech papers.
Roslyn’s petition argued that the First Amendment and federal common law provide a strong presumption that the press and public have a right to view court materials. To hold the court responsible, the petition claims this option must be used.
Roslyn Layton, additionally wrote an article discussing the SEC’s position on ETH and XRP. After then, for whatever reason, it was taken off the website.
Hope someone made a hard copy and circulates the shit out of it https://t.co/uDxCbFtXWF
— bill morgan (@Belisarius2020) February 16, 2023
The XRP community reacted angrily to the news that was just released. The article “Why the SEC Handles Ripple and Ethereum Differently” is temporarily unable to read due to technical difficulties. A message from the editor seems to indicate that the page is no longer live.
Yet, owing to screenshots that were shared across the XRP community, the article may still be accessed. Moreover, digital assets aficionado Bill Morgan revealed on Twitter that the document may still be seen in reader mode on certain browsers. This information was shared by Morgan.