Legal expert and pro-XRP supporter John Deaton stressed the significance of Decide Torres addressing the underlying asset and secondary market gross sales in her ruling in a lengthy Twitter conversation. He compared the situation to Telegram while emphasizing how Gramme failed to meet the criteria outlined in the 2019 SEC Framework for Digital Belongings. According to this approach, a digital asset is unlikely to meet the requirements of the Howey check if it can be used to generate quick cash.
He thinks Decide Torres’ decision should address the underlying asset and secondary market gross sales. While it is possible for her to ignore these difficulties and issue a judgement, Deaton argues that doing so would constitute a significant instance of judicial activism. By doing so, she would be violating the SEC’s idea and failing to address these crucial issues.
Deaton emphasizes how the circumstances in the Ripple instance are different from those in a pure ICO case, such as Telegram, which lacked a functional platform. He points out that, unlike XRP, Gramme was not examined by the U.S. Government Accountability Office (USGAO) in 2014 as a “digital foreign currency” used in a decentralized payment system.
Additionally, he notes that, unlike XRP, Gramme was not specifically mentioned as a “digital foreign currency” in the Monetary Stability Oversight Council’s (FSOC) 2019 Report. Additionally, MoneyGram did not use XRP in the same way as Gramme, despite filing documents with the SEC suggesting XRP’s intended usage in MoneyGram’s international business.
Deaton further claims that firms like Bailard Inc. provided ethics disclosures to the SEC stating that they would only invest in and trade the three digital assets widely recognized as non-securities: BTC, ETH, and XRP, with Gramme conspicuously omitted from the list.