Paul Grewal, the chief legal officer of Coinbase, and John Deaton, a well-known pro-crypto attorney who represents XRP investors, had a recent social media interaction that clarified a key legal point about Ripple’s current legal dispute with the SEC.
Their discussion centred on the importance of the Second Circuit decision Revak v. SEC Realty from 1994.
Grewal, although praising the case, emphasised a noteworthy feature that demonstrated the impracticality of interpreting an investment contract using a “ecosystem” access perspective. Grewal therefore underscored the court’s position on the Howey test, saying that the test is not readily satisfied by a simple relationship between investor fortunes and promoter activities. The court ruled that for the investments as a whole to rely on luck, there must be a common enterprise that is fundamentally dependent on the skills of the promoters.
https://x.com/JohnEDeaton1/status/1751407342086701385?s=20
John Deaton, who shared Grewal’s viewpoint, compared the Revak case to the ongoing legal disputes involving LBRY, Ripple, and Coinbase. He emphasised the jurisdictional subtleties in particular, pointing out that the Second Circuit’s Revak judgement is relevant to the Ripple and Coinbase cases.
Ripple, Coinbase, SEC: Latest
The current legal disputes between Coinbase and Ripple Labs, two well-known cryptocurrency startups, and the SEC will have a big impact on how the digital asset market develops. A federal court decided on January 18 at the latest, allowing the SEC to move on with its complaint against Coinbase.
But the court also reduced the lawsuit’s scope, rejecting a number of the SEC’s allegations. Given that it reduces Coinbase’s possible legal responsibilities, this ruling was viewed as a partial triumph for the corporation.
Regarding Ripple, the SEC has submitted a move to get Ripple to provide more internal records pertaining to the XRP sale. This action implies that the SEC is still pursuing its case against Ripple with great vigour.
