Prominent cryptocurrency advocate and lawyer John Deaton has taken to Twitter to assert that XRP secondary market transactions are not securities. In reference to a tweet by former SEC director Marc Fagel, Deaton provided examples to highlight XRP as a non-security.
In a tweet, Deaton wrote: “One way to consider the securities question is to look at the characteristics of the transaction: Is the person who is transferring the XRP a promoter? Is the person who is receiving it an investor? Is there 1 party, or multiple parties who are making the trade?”
Deaton then went on to explain his point, using an example of a mother trading XRP to her daughter for a cup of coffee. He said: “One example would be you give your daughter some XRP for a cup of coffee. That’s one party, no promoter, no investor. That’s not a security.”
Deaton concluded that the example is one of the ways to analyze the question, whether or not a particular transaction involving XRP is a security. He said: “There are many other ways to consider this, but the simple view is that secondary market transfers of XRP (and many other crypto assets) are not securities transactions.”
Ultimately, Attorney Deaton’s analysis highlights XRP as a non-security, even when dealing with secondary market transactions.
