Crypto legal expert Jeremy Hogan has named what he thinks is Ripple’s strongest defense against the US Securities and Exchange Commission (SEC) in the lawsuit involving XRP.
The SEC has accused Ripple of illegally issuing XRP to investors as a security and alleges that the token is still one today.
In a new AMA (ask me anything) video, Hogan addresses how the price of XRP has a strong correlation with other crypto assets, such as Bitcoin or Cardano.
According to Hogan, if XRP werea security, its price should be correlated with Ripple’s actions and not with the performance of other cryptocurrencies.
The attorney says the correlation with other crypto assets is likely “Ripple’s strongest defense” in their lawsuit with the top regulator.
The legal expert points to a research paper from 2018 by Andrew Burnie of the Alan Turing Institute that outlines how the price of various cryptocurrencies correlate with each other. According to the paper, XRP is correlated to ADA by a factor of over 70%.
“As you are aware, the SEC has to prove that XRP is a security, and one thing it will have to show is that its retail purchasers – me and you – are looking to Ripple to increase the value of XRP, and what this paper shows is that the price of XRP is not really correlated to anything Ripple does. In other words, Ripple ended its partnership agreement, for example, on March 9th with Moneygram and nothing happened to XRP’s price. However, according to this research paper, the price of XRP is heavily correlated with Cardano. 71% correlated according to the experts… Ripple has briefly touched on this part of their defense, but this is the first time I’ve seen that it correlates so strongly with Cardano. Very interesting.
Ripple can announce a great business deal, the XRP price won’t budge much. But if the price of Cardano falls 10%, you’d expect to see the price of XRP fall 7.1%. That is not how a security acts. I really hope that Ripple has good expert witnesses lined up and statistical correlation.”
ICheck Price Action
Don't Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inbox
Follow us on Twitter, Facebook and Telegram
Surf The Daily Hodl Mix
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/Everyonephoto Studio