The debate between CryptoLaw Founder and Pro-XRP attorney John E.Deaton and Marc Fagel, a former United States Securities and Exchange Commission (SEC) lawyer has continued. Responding to the question raised by Fagel on May 5, 2023, Deaton said there has been no post-Howey case that found the underlying asset itself to be security. Moreover, he pointed out that there has never been a case when an investment contract was found where a zero privity exists between the buyer and promoter of an asset.

Deaton's assertions were based on a paper written by Lewis Cohen which analyse all security cases in the US since the popular Howey lawsuit. He believes Cohen is the best person to answer Fagel's questions.

Deaton further argued that an investment contract is determined by the circumstances surrounding the offer and sale of the transaction, including the parties involved. He backed his argument by citing Supreme Court’s decision in the Howey Case where the court said that it is immaterial whether the enterprise is speculative or non-speculative or whether there is a sale of property with or without intrinsic value.

To better explain his point, Deaton created a scenario and said it is easy for anyone to argue that the Howey test was met in it. He stressed the necessity of going through each transaction when it happens to determine the security violation. He believes secondary market sales of an asset can constitute a security.



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