Jeremy Hogan of Orlando (USA) law firm Hogan & Hogan examined in a YouTube video what he saw as the worst possible scenario for Ripple Labs in the lawsuit filed by the US Securities and Exchange Commission (SEC).

He initially stated that there can never be a general “fix” regarding XRP as a security under US law. “The situation is always a snapshot of time,” he said. To highlight this argument, Hogan quoted former SEC chief Clayton in his 2018 speech:

“In his speech, Clayton said that if someone sells you a token that will allow you to use their laundry, it is not a security. BUT if someone sells you and ten other people tokens that they can use in a laundry that is still being built, and then uses the sales revenue to build the laundry and you expect to be able to sell the tokens to another person for more money after the laundry is completed, THIS is a security. . But once the laundry is set up, any token sale at that time is not a sale of securities, they are just a type of currency. As Clayton said at the end of the story, just because there is a security today doesn’t mean there will be a security tomorrow. ”

The lawyer believes that “this is exactly what we see in the sale of XRP.” As more use cases are created for XRP and the XRP ledger becomes more decentralized, XRP is less likely to be a security. Like former SEC official Joseph Grundfest, Hogan questions the “real reason” of the SEC’s action against Ripple. But Hogan approached the case from a different angle, agreeing with Ripple Labs CEO Brad Garlinghouse that there could be an “attack” on the entire crypto industry behind the case:

“If you want to control an industry that includes over a thousand different companies, many of which are decentralized and difficult to control, what is the more efficient way to control it? Is it to sue each company individually or to control a handful of large markets where these companies’ goods are traded? ”

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Additionally, Hogan is optimistic that XRP will not be classified as a security. In addition, as previous SEC lawsuits have indicated, the case may end without an “clear winner”. Like other legal experts, Hogan thinks an agreement between Ripple and the SEC is the most likely outcome of the lawsuit. He considered cases against Hogan, Paragon and Kik Interactive to understand what can happen in a worst case scenario. In the Paragon case, there was a financial settlement and an order to violate securities laws. On the legal implications, Hogan said:

“This gave me a clue that even a bad solution will only affect the XRP held in custody by Ripple, and is likely to be the point at the resolution negotiations.

The case against Kik was seen to the end by the SEC and resulted in “100% defeat” for Kik. However, he said the decision was precisely interesting because even in the worst case, there is still a mechanism to sell XRP in escrow that could allow Ripple to continue expanding its use of XRP. It limits Ripple’s “dumping” of XRP in the market. On the most likely outcome, Hogan said:

“My conclusion was that the EN likely outcome of the SEC case would be a deal that included a massive fine or fine for the sales of 2013-14 and maybe 2015, and some kind of control or limitation in the sale of XRP in charge. And this is a conservative result for me. This result will undoubtedly hurt Ripple, but by no means a fatal blow. “

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