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Short Summary
Main recommendation: Attorney Jeremy Hogan does not see a verdict against Ripple as likely, and argues the lawsuit's worst-case impact would mainly hurt future ICOs rather than more mature coins like XRP. He addresses a doom scenario in which XRP is deemed a security, argues that the SEC's focus is on Ripple's early unregistered fundraising, and says earlier government opinions can help but are not binding. He also stresses that this is not legal advice.
Key Points
- The doom scenario needs several conditions: a trial next year, a Ripple loss, and a loss on appeal. Hogan says he does not expect this.
- If XRP were deemed a security, U.S. exchanges would likely be forced to stop selling XRP unless they registered as securities exchanges, with trading possibly limited to offshore exchanges.
- Hogan argues a verdict would hurt future ICOs (initial coin offerings) more than mature coins such as XRP, since XRP has moved into open-market use as a currency-like asset.
- The statute of limitations is five years from the violation under Gabelli v. SEC, which he says removes most transactions from before December 2015. This does not end the lawsuit.
- The Ethereum opinion that it is not a security is not binding on the SEC but may be useful as admissible evidence under Federal Rule of Evidence 803(8), the public record exception.
- The 2015 FinCEN settlement with Ripple treated XRP as a currency. Hogan believes it does not legally end the SEC case but is persuasive evidence.
Details Worth Noting
- Concrete instructions: No step-by-step instructions were given. The only actionable advice is a suggestion that Ripple's defense team could introduce the Ethereum opinion and FinCEN actions as evidence, and that FinCEN agents could be qualified as expert witnesses to testify that XRP is a currency.
- ICO naming: Hogan notes that the term "ICO" sounds like "IPO" (initial public offering), which he says makes such offerings look like stock sales.
- Precedent: The SEC won against two newer cryptocurrencies in 2019 over ICOs.
- Ripple's early years (2013 and 2014) involved active capital raising and using XRP in ways resembling a security.
- Hogan states he owns Ethereum but not XRP, and that his statements are not legal advice.
Bottom Line
The lawsuit's most serious outcome would hit U.S. XRP trading, but Hogan sees the risk as limited by procedural hurdles, the statute of limitations, and the coin's maturing currency-like use.
