Pro-XRP lawyer John E. Deaton has shed light on the significance of the “Torres Doctrine” in the crypto industry. The landmark decision in the Ripple vs US SEC case, presided over by Judge Analisa Torres, has established the “Torres Doctrine” as a precedent that will restrict the application of the US Supreme Court’s Howey Test to modern-day blockchain technology.
Judge Torres applied the Howey Test rigorously to each type of XRP sale that the US SEC claimed violated securities laws. This strict application has garnered respect from many lawyers and politicians, including US Congressman Richie Torres, who referred to it as an adapted Howey Test for the crypto industry.
The “Torres Doctrine” is expected to bring legal clarity to crypto regulation in the US, at a time when the SEC has been criticized for its failure to effectively regulate the industry and its reliance on a regulation by enforcement approach.
Lawyers such as John Deaton, James Murphy, James K. Filan, and Coinbase’s Paul Grewal have applauded Judge Torres’ decision in the Ripple vs SEC case, as it adheres to the Howey Test while considering the unique aspects of investment contracts in the crypto industry. They argue that while institutional sales comply with all factors of the Howey Test, programmatic sales of crypto on exchanges do not meet all the test’s criteria and therefore do not violate securities laws.
Deaton also emphasized that the Howey Test does not require judges to evaluate the level of sophistication of buyers or consider whether the result aligns with the policy implications of the Securities Act. This highlights the need for a more tailored and contemporary approach in assessing digital assets.
In the ongoing legal proceedings, an appeal against Judge Torres’ decision could contest the satisfaction of the common enterprise factor between XRP holders and Ripple. Additionally, the ruling on consumptive intent may be referred to the jury, making it more challenging for the US SEC.
While these matters are still to be settled, Ripple’s native cryptocurrency XRP has seen a surge in price, climbing 8% in the past 24 hours and currently trading above $0.80, with a market cap of $41.68 billion. This price rally has contributed to XRP’s position as the fourth-largest cryptocurrency in the market. Analysts forecast even further gains for XRP, predicting a rally past $1 and even highs of $27.
the establishment of the “Torres Doctrine” through Judge Torres’ decision in the Ripple vs SEC case has set a precedent for the application of the Howey Test in the crypto industry. This adaptation aims to provide clarity and fairness in the regulation of digital assets, ensuring that factors unique to blockchain technology are adequately considered. As Ripple’s legal battle continues, the XRP price has soared, offering potential investors optimism for substantial gains in the future.