XRP's Legal Battle: Deaton Defends Against Calacanis' 'Security' Claims

Attorney John Deaton has come to the defense of XRP, refuting claims that it is a 'centrally controlled security.' The debate surrounding XRP's classification has intensified as discussions about the proposed U.S. strategic crypto reserve continue.

Technology entrepreneur Jason Calacanis recently took to social media to assert that XRP is a 'centrally controlled security.' In his post, Calacanis questioned the legitimacy of XRP as a decentralized asset, stating that if the SEC allows it to trade like Bitcoin, securities law would be worthless. He warned that allowing XRP to operate like Bitcoin could create chaos in the markets, with potential for startups and funds to offload large amounts of coins on retail investors, causing instability.

Calacanis also argued that such chaos would not benefit the U.S., as the country is known for its stable and controlled markets, which attract global investments. He suggested that if XRP could only be traded by individuals who pass a 'ophisticated investor test,' it would ensure that people are educated about the risks before investing too much into projects like XRP.

However, Calacanis' comments have sparked criticism from various corners of the crypto world. John Deaton, the founder of Crypto Law, responded with a rebuttal, sharing a document that argued XRP, as a digital token, does not meet the legal requirements to be classified as an investment contract under the Howey Test. Deaton said that XRP is not a 'contract transaction or scheme,' countering Calacanis' view that XRP is a centrally controlled security.

The debate surrounding XRP's classification and potential inclusion in national crypto reserves remains uncertain, with ongoing discussions about its regulatory classification. As the crypto scene continues to evolve, the future of XRP in the U.S. remains a topic of interest and debate among investors and regulators alike.