A major discrepancy in the SEC's argument on their lawsuit against blockchain platform Ripple was recently unveiled by an XRP community member. Mr. Huber (Leerzeit) published two documents which highlight the opposing positions taken by the regulator. As stated in the SEC's 'Framework for Investment Contract Analysis of Digital Assets', the status of a token's development is mentioned as a contributor towards ascertaining its security status according to Howey Test. However, in its intervention in Ripple's case, the SEC has denied the importance of the status of development, evidenced in their “XRPL became fully functional” query in response to Ripple Chairman Chris Larsen's question.

The discovery has triggered a mixed reaction in the XRP community with many members referencing the judgement by Judge Sarah Netburn. In July of last year, Judge Netburn critiqued the SEC's strategies in her attempt to control the market, notably their vacillations on the William Hinman documents. As a means to an end, the SEC initially claimed that the Hinman documents represented Hinman's personal views, however later shifted their opinion to say that documents were handed over through attorney-client privilege.

It remains to be seen how the discovery will affect the outcome of the court ruling which is expected soon. As CryptoLaw founder John Deaton has suggested, the ruling could come in anytime soon. Irrespective, this situation underscores the importance of SEC's adherence to the law and truthfully informing the public.



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