Researcher Nicholas Weaver Of Berkeley Says XRP Coin Is a Security, Committed Fraud
The debate if XRP is a security or not has been heating up ever since 2016. In fact, just last month Ripple revealed that their legal executives are working with SEC to convince the regulators otherwise.
Now, Nicholas Weaver, a researcher at the International Computer Science Institute & Lecturer at UC Berkeley took shots at the controversial crypto on Twitter.
The Howey Test points to a 1946 case that reached the Supreme Court, SEC v. W.J. Howey Co., a lawsuit involving the Howey Company of Florida. The test determines if the value of a transaction for one of its participants is dependent upon the other's work. Precisely, the Howey Test concludes that a transaction signifies an investment contract if “a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party.”
The professor then walks through the Howey Test on XRP step by step.
Weaver has a point. Everyone who buys XRP calls it an “investment” and expect profits from it. He then shows in point 3 and 4 that this sort of investment is a common enterprise and even third parties can benefit from it.
In his last Tweet, the researcher took shots at Ethereum too.