A ruling by the United States Southern District Court of New York in the legal battle between Ripple Labs and the US Securities and Exchange Commission (SEC) is inching closer. And according to an analysis by attorney Jeremy Hogan, who has been following the case with video updates since the beginning, the odds of a Ripple victory are good if Judge Torres understands the technology.

As the attorney notes, however, a Ripple victory is by no means a no-brainer, especially since the case represents the entire crypto industry’s biggest battle against the SEC. “This is a nuanced legal battle on which the future of “crypto” as we know it may hinge,” Hogan states.

The Key Question For A Ripple Win

According to Jeremy Hogan, the decisive factor will be whether Judge Torres understands the decentralized nature of Web 3.0. This will determine whether there was a “contract” between Ripple and the XRP buyers.

The BIG BATTLE between the SEC and CRYPTO (a thread).

A lot of comments re the below thread suggested it’s a “no-brainer” and asked, why is it taking the Judge so long?

Not true. This is a nuanced legal battle on which the future of “crypto” as we know it may hinge. https://t.co/wsFfzxkuKb

— Jeremy Hogan (@attorneyjeremy1) April 10, 2023

As the lawyer points out, there must be a “contract” in order to have an “investment contract,” which in turn is an essential element of the Howey test. The SEC argues in a series of briefs that there doesn’t have to be a formal-written agreement.

Howey defines that four facts constitute a security: the (1) investment in money (2) in a common enterprise (3) with the expectation of profit (4). What the SEC is really arguing, according to Hogan, is that items 2, 3 and 4, taken together, displace the need for the elements of a legal contract.

“In other words, Howey doesn’t require a formal contract because the “common enterprise” and “expectation of profits” IS the contract analysis,” writes Hogan, who notes that the SEC has consistently succeeded in previous crypto-related cases because the “post-loss obligation” issue was not raised.

Judge Torres, fortunately for Ripple, has so far not placed too much weight on what her colleagues did in the Telegram and Kik cases. That’s another reason Hogan is optimistic in his legal analysis:

Looking at the SEC’s counterarguments and cases, you can see why lawyers think that Ripple raised this issue with an eye toward obtaining an appellate ruling. I disagree – there is enough in the Ripple briefs for the trial judge to rule in its favor.

Therefore, the decision will hinge on the decentralization issue. The reason the other crypto companies lost, according to the attorney’s analysis, is that the purchase of cryptocurrencies was viewed from a traditional, centralized standpoint.

If Judge Torres understands the technology and therefore the decentralized nature, Ripple will be victorious against the SEC, Hogan says:

The difference in crypto is that it DOES make sense to purchase crypto, because it is decentralized. No one owns the “network. And so it makes sense that someone might purchase XRP as an investment without having a contract with anyone. This is the key differentiator.

If the judge fails to grasp “crypto,” Hogan predicts an appeal by Ripple. However, a defeat in the district court would not be a “dagger in the heart,” as the Howey test is merely outdated and would need an upgrade by an appellate judge or the Supreme Court.

At press time, the XRP price stood at $0.5214 and was rejected at the first resistance level at $0.5297.