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- Jeremy Hogan argues that the SEC’s case against Kik Interactive is substantially different from the case against Ripple in terms of judge.
- Analisa Torres might have a better understanding of the technology and not just rely on the SEC’s case authority.
The XRP community’s favorite lawyer, Jeremy Hogan, posted a video to talk about the fulcrum in the U.S. Securities and Exchange Commission (SEC) litigation against Ripple, and why Ripple “dodged a bullet” (without giving legal or financial advice, of course). Hogan discussed that judges play a critical role in very complex litigation, as they must cover a very broad area of law and cannot be an expert in every field.
The case of Kik Interactive v. SEC illustrates this very clearly. In October 2020, New York Judge Alvin Hellerstein ruled that Kik’s digital currency was a security and granted the victory to the SEC. “Ripple is lucky this is not their judge,” Hogan said. Hellerstein was in his 80s, and as court transcripts show, he didn’t know what a blockchain-based token was, nor a distributed ledger.
So during Ripple’s pretrial conference, Hogan paid particular attention to U.S. District Judge Analisa Torres’ choice of words. The 61-year-old Harvard graduate expressed herself very selectively, using both the SEC’s preferred term for XRP, “digital asset,” and Ripple’s term, “cryptocurrency,” which may mean she understands the difference:
And the only reason she would use both terms is to show impartiality. But that also means that she understands already, even this early in the case, why the terms used are important, and what’s the difference is between them. That’s just to me a sophistication and understanding what the case is all about.
That’s why Kik Interactive lost – Ripple not?
As Hogan elicited, this was not the case with Kik’s judge, which is why Hellerstein asked the SEC lawyers about previous court decisions on which he could base his decision. However, this is something the SEC has been working on and spent from 2017 to 2019 “putting together this case authority.”
So when a judge asks about prior judicial decisions, the SEC was “ready with six or seven cases, they could site as persuasive.” This, Hogan said, was critical to Kik’s defeat:
So what I could summarize from my review was that Kik Interactive was probably dead in the water. This judge was either not capable or going to be flexible enough to make a nuanced interpretation of law that an emerging technology case would require, and therefore I believe Kik lost.
Regarding Ripple’s judge Analisa Torres, however, Hogan has a better feeling because she is “curious,” as Hogan said in reference to a transcript from a civil case.
This judge is curious once to get the truth of the situation and is willing to think outside the box. This jives with the fact that she is already up-to-speed enough to understand the nuance between a digital asset and a cryptocurrency in a legal context. But perhaps most important I see a humanity in this judge […]
I am sure Ripple has done their research, knows all about this judge and are tailoring their arguments to show her how a security designation at this juncture would harm thousands and thousands of XRP holders. That is the key to me. This judge needs to understand […] the potential devastation impact on tens of thousands of people who are or have been holders of XRP.