- Michael Arrington, the founder of TechCrunch, raised questions on SEC’s case filed against XRP
- Arrington expressed his opinion of the Howey test
- He believes that the test is irrelevant in today’s day and age
TechCrunch’s Michael Arrington, shares his views on the ongoing allegations made against Ripple’s XRP by the Securities and Exchange Commission of the U.S.
SEC vs Ripple’s Howey Test Is Outdated, Says Arrington
Michael Arrington is TechCrunch’s co-creator. It is an online platform that publishes news-oriented towards startups and high technology companies. During an interview with Layah Heilpern, he spoke about the U.S. Securities and Exchange Commission’s (SEC) case against Ripple and its cryptocurrency XRP.
The claims outlined in the case suggest that starting in 2013, Ripple began to raise assets. This was made possible through the trade of their cryptocurrency XRP in an unregistered securities proposal to buyers in the U.S.
The crypto network additionally dispersed billions of XRP in return for non-cash consideration, as per speculation. This included labor services and market-production administrations.
The company’s co-founder, Christian Larsen, and its former CEO, Bradley Garlinghouse, have also been at the receiving end of the SEC’s complaint. They allegedly carried out numerous individual, unregistered deals of XRP, which is approximately worth $600 million. Following this, the accused could not prove the legitimate registration of the sales that had taken place, infringing upon the securities laws’ registration provisions.
Hope For Clearer Regulatory Measures
Arrington shed light on the Howey Test, set up in a Supreme Court case, and decides if individual exchanges qualify as investment contracts subject to protection laws. Such a contract exists when there is a venture of money in a typical undertaking with a reasonable assumption that benefits will be procured from others’ endeavors. Arrington thinks that the test is obsolete and insignificant in the digital age.
He shared his hopes of receiving clarity in terms of regulatory provisions regarding cryptocurrency. This would help companies operate effectively without unknowingly breaching laws. He simultaneously suggested that the SEC is evolving with time, and they would probably escalate the case to a trial.
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