Charles Hoskinson on SEC Appeal: Is the Howey Test Outdated?

Charles Hoskinson Faces Criticism Over Meme Coin Incident

The U.S. Securities and Exchange Commission (SEC) has officially appealed its case against Ripple following a historic court decision on August 7. The court ordered Ripple to pay a $125 million civil penalty, far less than the $2 billion initially sought by the SEC. The SEC appealed, arguing the decision conflicts with Supreme Court precedents and securities laws.

Stuart Alderoty, Ripple’s Chief Legal Officer, expressed his disappointment with the SEC’s decision to appeal. He criticized the lawsuit, calling it “irrational” and “misguided” from the beginning. 

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Alderoty highlighted that the court had already dismissed the SEC’s claims that Ripple acted recklessly. He also pointed out that the case did not involve any accusations of fraud, victims, or financial losses.

Charles Hoskinson Weighs In

Charles Hoskinson, the founder of Cardano, responded to Alderoty’s remarks with a hint of irony. 

He suggested that the Ripple-SEC legal battle could potentially replace the Howey Test, the legal standard for determining if a transaction qualifies as an investment contract under U.S. securities law.

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While his comment was partially made in jest, Hoskinson noted that the Howey Test was established in 1946—decades before the creation of XRP and Ripple. The Ripple case has garnered widespread attention in the cryptocurrency market, with many industry participants viewing it as a crucial moment for regulatory clarity around digital assets. 

The outcome of the SEC’s appeal could potentially establish new standards for how securities laws apply to cryptocurrencies, setting a precedent that could shape the future of the industry.

Disclaimer: The information in this article should not be considered financial advice, and FXCryptoNews articles are intended only to provide educational and general information. Please consult with a financial advisor before making any investment decisions.

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