- Ripple Chief Legal Officer Stuart Alderoty discusses Andy Warhol’s lithograph case to support the thesis that XRP is not a security.
- Alderoty argues that art lithographs, even when sold for investment, were not considered securities by the SEC.
- Alderoty’s views support the thesis of Ripple’s win in the US financial regulator’s lawsuit against the payment firm.
Stuart Alderoty, General Counsel and Chief Legal Officer (CLO) at Ripple, recently cited a Supreme Court verdict on Andy Warhol’s lithograph case to support his argument that “XRP is not a security.” According to Alderoty, the US financial regulator is well aware of the case, and this likely flips the outcome in payment giant Ripple’s favor.
Also read: XRP price likely to suffer a setback as Ripple bulls rethink strategy
Ripple’s CLO cites Andy Warhol’s lithograph case to strengthen Ripple’s argument
The prolonged legal battle between the US financial regulator, Securities and Exchange Commission (SEC), and remittance firm Ripple continues as the community looks up to the payment giant’s CLO for answers.
Alderoty reminded the community that as of May 19, the Supreme Court made it clear that facts from old cases do not apply mechanically. The party citing a fact from a prior case needs to adapt it to the new world, taking the underlying statute and the “soil” of the common law that comes with it.
Friday is for the legal nerds – yesterday in its Twitter opinion, the Sup Ct made clear that you don’t just mechanically apply factors from an old case. You must adapt them to a new world by looking at the underlying statute and the “soil” of the common law that comes w/ it. 1/2
— Stuart Alderoty (@s_alderoty) May 19, 2023
Ripple’s Chief Legal Officer said that the company's argument that the Howey test (that determines whether an asset is a security) carries the “soil” of common law in which an “investment contract” requires a contract for an investment that creates post-sale rights for the purchaser and obligations on the seller.
In the case of XRP Ledger’s native token XRP, there was no obligation on the seller to drive the value of the altcoin higher, post its sale. Alderoty believes this argument is sufficient and draws inspiration from Andy Warhol’s lithograph case from the 70s.
In the 1976 Supreme Court case, the SEC said that “art lithographs - even when sold for investment - are not securities when there are no post sale contractual obligations from the seller in favor of the buyer?”
The Sup Ct’s Andy Warhol lithograph case got attention last week. Did you know that in 1976 the SEC said that art lithographs - even when sold for investment - are not securities when there are no post sale contractual obligations from the seller in favor of the buyer? pic.twitter.com/S1mtaeHolc
— Stuart Alderoty (@s_alderoty) May 21, 2023
Does the SEC know XRP is not a security?
Alderoty’s example raises the question of whether the US financial regulator is aware that XRP does not qualify as a security. In case the answer is affirmative, it strengthens Ripple’s defense against the SEC and fuels a bullish thesis for a positive outcome for the cross-border payment remittance firm.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Turn off Solana and win $400,000 - Solana Foundation executive announces offer
Solana has been touted as an Ethereum killer, but as with every blockchain in the crypto market, the network does not come without its fair share of issues. While many who get hacked or exploited deal with the issues after the fact, Solana intends to get a step ahead by making a very lucrative offer to white hat hackers.
Grayscale vs. SEC deadline: Commission faces a midnight Friday deadline to challenge August 29 loss
Grayscale Investments secured a resounding victory in its longstanding case against the US Securities and Exchange Commission in late August. The lawsuit started in October after the firm approached the D.C. Circuit Court pushing to have its Bitcoin Trust converted to an Exchange-traded fund.
Loom Network price hits strong weekly resistance after 32% surge as LOOM ranks high on Korea’s Upbit
Loom Network token is highly bullish, passing as a rather lucrative investment for scalping traders, buying and selling the asset within a short period to make small profits.
Voyager founder charged by CFTC for fraud and by FTC for misleading investors that lost $1 billion
Voyager was among the first crypto companies to collapse and file for bankruptcy in 2022. While the platform has been making efforts to return its customers' assets since then, it looks like the regulatory bodies are not willing to be patient.
Bitcoin: Can BTC bears challenge crypto’s 2023 bull rally?
Bitcoin (BTC) price is at a critical juncture in the weekly time frame, where bulls and bears are battling for control. However, a multi-time-frame analysis shows that BTC is bullish daily and is likely to rally higher.