Kathryn Haun, CEO of Haun Ventures, a $1.5 billion venture capital fund, and a former general partner at Andreessen Horowitz, believes the Court drew a reasonable line in the latest Ripple ruling. She considers the Ripple ruling an overall good outcome for the industry.
According to Haun, legal experts also hold the same opinion, with the consensus being that the court drew a reasonable line — distinguishing between XRP itself (which is not an investment contract and thus not a security) and certain XRP transactions in which institutional investors made direct payments to Ripple.
Some non-legal advice musings on the Ripple decision, including two main takeaways:
1/ The Court drew a reasonable line and overall it’s a good outcome for the industry. For other suits w/ the SEC, we believe the Supreme Court’s “major questions doctrine” will play a larger…
— Kathryn Haun (@katie_haun) July 15, 2023
She highlighted a precedent set with the Ripple ruling, saying this would track the line the crypto industry will draw in upcoming cases against the SEC: Tokens are never “investment contracts” on their own — only binding contracts imposing post-sale obligations on the seller can constitute investment contracts and hence tokens traded on exchanges or secondary markets would rarely qualify.
Overall, Haun believes the court’s decision is pretty favorable for the industry, especially concerning the secondary markets at issue in several pending lawsuits.
More good outcomes are to come
Haun expressed optimism that more outcomes like Ripple’s are coming and will provide more guidance for the crypto industry.
She pointed out that the complexity of the court’s reasoning is further evidence that Congress should be the one to decide how cryptocurrencies will be treated going forward in the U.S. If Congress does not take action, the courts, not the SEC, will have the final say.
The venture capitalist believes that the Supreme Court’s “major questions doctrine” would play a bigger part in other lawsuits against the SEC, strengthening the industry’s arguments even more.
Immediate appeal in Ripple case seems unlikely
In its response, the SEC claims it is currently reviewing the Ripple decision. The CEO of Haun Ventures noted the possibility of an appeal, though it might not happen right away.
The SEC would have to petition the court to separate this ruling from the portion going to trial and second, it appears unlikely that the SEC truly seeks legal clarity, according to Haun, making an early appeal seem unlikely.
She stated, “The Commission benefits from the current confusion, and losing these issues on appeal would jeopardize its entire enforcement agenda. So I’d be surprised if the SEC tried to appeal now.”
