- Prometheum’s Aaron Kaplan compares the Ripple vs SEC case to LBRY vs SEC, predicting a victory for the Commission.
- The Ripple community members as well as Attorney John Deaton question his knowledge about the case and label SEC’s argument as “erroneous”.
The Ripple vs SEC lawsuit is nearing its final ruling with both parties confident of a victory. Recently, the 2018 speech of the former director of the US Securities and Exchange Commission (SEC) William Hinman was made public upon the court’s directive and is expected to have a huge impact on the case. Regardless of the confidence of the Ripple community, founder and CEO of crypto brokerage firm Prometheum Aaron Kaplan thinks otherwise.
According to Kaplan, SEC has an edge over Ripple in this case. In his statement, the case has a lot of similarities with the content distribution decentralized blockchain platform LBRY Credits case when the SEC “dragged” them to court in March 2021.
The primary charge was that the company violated securities law by offering unregistered LBC tokens. In that case, the Court ruled in favor of the Commission. In response to the ruling, LBRY CEO Jeremy Kauffman stated that the decision is a huge threat to the entire crypto ecosystem as it sets a standard to classify every crypto as a security.
U.S. District Judge Paul Barbadoro in Concord, New Hampshire stated:
Nothing in the case law suggests that a token with both consumptive and speculative uses cannot be sold as an investment contract.
With this, Kaplan claims to have observed that both cases have similar causes of facts, and could have the same outcome.
I anticipate the SEC will win this case as every indication points to a decision in the commission’s favor.
The Ripple Community Reacts to Kaplan’s Prediction
Obviously, Kaplan’s prediction was not taken lightly by the Ripple community who have believed all along that SEC has no rational point against the blockchain company. According to one XRP community member, Kaplan was biased in his remark as he only focused on similarities without any mention of differences.
The user wrote:
Is it just me or does. @PrometheumInc CEO Aaron Kaplan looks like the “poster child” for Hucksters, Fraudsters, and Scam Artists!
Kaplan is known for mostly supporting SEC including their regulatory approach. Speaking at the House Financial Services Committee hearing on June 13, he declared his support for SEC chair Gary Gensler’s regulatory policies. In a hearing conducted by the House Committee on Financial Services to discuss the best approach to regulate digital assets, Kaplan was one of the witnesses. His remark on the Ripple vs SEC case and his agreement with most of the SEC’s decisions against the crypto industry are said to be a result of his relationship with the commission.
It was observed that his Prometheum became the first-ever Special Purpose Broker-Dealer (SPBD) for digital asset securities after receiving approval despite the strict enforcement actions against the Industry. In response to this, the Freedom of Information Act (FOIA) request has been filed with the SEC by the Blockchain Association to demand information about Prometheum.
Deaton has also reacted to Kaplan’s projection, stating that the Prometheum CEO has no idea of the Ripple vs SEC case.
Very odd. Nothing about the cases he cited nor even the Hinman speech itself or the warnings he got from the SEC staff about the speech support the notion that “the token is a security”. It is the one universal agreement in everyone’s Howey analysis that the asset itself is never a security. Except, of course, in the SEC’s legal theory in the @Ripple case. So this guy doesn’t seem to get anything except to cheer on the SEC with erroneous arguments.
XRP could see the price skyrocketing to a new all-time high when Ripple wins the case. However, there could be a considerable fall when Kaplan’s prediction materializes.
