SNEAK PEEK
- Applying outdated legal tests to the blockchain can yield surprising outcomes.
- The incongruity lies in the 1934 Securities Act’s policy, not the judicial decision.
- Judge Torres’ Ripple case decision reveals overlooked key argument facets.
In an evolving digital landscape, prominent legal figures John E Deaton and Bill Morgan have offered pertinent insights into the SEC case involving blockchain technology. Unveiling the intricacies, they’ve pointed out the inherent problem of applying a legal test from 1946, known as the Howey factors, to contemporary technological frameworks.
In his argument, Deaton significantly acknowledges the legitimate grounds to question the outcome of the Howey test application. However, he shifts the blame from Judge Torres, and rightfully so, towards Congress and the SEC. Consequently, the paradox lies not with the judicial decision but with the policy implications of the 1934 Securities Act.
That’s an insight that is highly relevant which the SEC supporters are missing. If you take a very broad case about an 8 year offering with different types of sales which you don’t distinguish to the court and ask the judge to apply an ancient legal test you should expect the…
— bill morgan (@Belisarius2020) July 24, 2023
In response, Morgan highlighted that Deaton’s insights are highly relevant, which the SEC supporters are missing. He says applying an antiquated legal test to eight-year offerings of different sale types can lead to surprising results. Accordingly, such an application does not do justice to the complexity of present-day blockchain technology.
On the other hand, the implications of Judge Torres’ decision in the Ripple case have left some followers with mixed feelings. An initial disappointment for Bill Morgan was categorizing sales to ODL customers, which were unfortunately lumped with institutional sales as investment contracts.
That will be great. It needs another excellent Deaton thread. The more I read it, after my initial disappointment that sales to ODL customers were lumped in with institutional sales as investment contracts, the sounder the reasoning seems to be. I still think there may be an… https://t.co/TuStQyh247
— bill morgan (@Belisarius2020) July 24, 2023
However, upon reflection, the logic behind the decision is seen as sound, suggesting that even the most ardent SEC supporters may be overlooking critical facets of the argument.
In conclusion, this perspective challenges the “attack the judge” narrative and brings attention to the broader implications. In his response, Deaton delicately treads on stakeholders’ responsibility and draws a clear line between judicial function and policy mandates.
