Lawyer Argues XRP is Not a Security

Last Updated: 10 April 2023

Jeremy Hogan, a partner at Hogan & Hogan law firm, believes that the United States Securities and Exchange Commission (SEC) has failed to legally demonstrate that Ripple’s XRP is a security. According to Hogan, XRP does not fit the definition of an “investment contract,” which is the “only” legislative definition it could “possibly” fit.

In a series of tweets on April 9, Hogan explained that XRP could only be considered a security under the definition of an “investment contract” as it does not fit the other definitions of a security such as stocks or bonds. However, the SEC has not demonstrated an implied or explicit investment contract in its suit against Ripple.

The SEC Lawsuit Against Ripple

The SEC initiated a lawsuit in December 2020, claiming that Ripple illegally sold its XRP token as an unregistered security. Ripple has long disputed the claim, arguing that it doesn’t constitute an investment contract under the Howey test. This legal test is used to determine if a transaction qualifies as an investment contract and was established in 1946 by the U.S. Supreme Court in the SEC v. W.J. case.

Hogan further argues that all of the “blue sky” cases, which the Howey case relies on for defining an “investment contract,” involved some form of a contract regarding the investment. Therefore, he believes that there was no such contract between Ripple and XRP purchasers relating to their “investment.”

Hogan’s Argument Against the SEC

Hogan’s argument against the SEC’s claim is that it has failed to demonstrate an implied or explicit investment contract. The SEC argues that the purchase agreement is all that is required, but Hogan believes this tears the “investment” from the “contract” as a simple purchase, without more, cannot be an “investment contract.” It is just an investment, like buying an ounce of gold, as there is no obligation for Ripple to do anything except transfer the asset.

Hogan states that the crux of the issue is not whether Ripple used money from the sale of XRP to fund its business, but if the SEC has proven that there was either an implied or explicit “contract” between Ripple and XRP purchasers relating to their “investment.” “There was no such contract,” Hogan claimed.


In conclusion, Hogan believes that the SEC has failed to demonstrate that XRP is a security under the Howey test. He argues that XRP does not fit the definition of an “investment contract” and that the SEC has not proven that there was an implied or explicit contract between Ripple and XRP purchasers relating to their “investment.”

The outcome of this case will have significant implications for the cryptocurrency industry, as it could set a precedent for how other cryptocurrencies are classified by regulatory bodies in the future.

Investors in the cryptocurrency market should closely follow the outcome of the SEC’s case against Ripple, as it could impact how regulatory bodies classify cryptocurrencies in the future. Platforms like Anon System and Bitvestment provide investors with the ability to trade XRP and other cryptocurrencies, allowing them to take advantage of potential market movements.

  • Ivan Brightly

    Ivan came across the topic of cryptocurrencies in early 2016 and, as an author and enthusiast, has been intensively involved with the topics of cryptocurrencies, blockchain and STOs ever since.

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