Before we get into the article, two things:

1. I do not hate the idea of the SEC in general. I believe that retail investors sometimes need guiderails to operate sometimes, and there should be a regulatory body to go after and punish malicious actors in the investment space.
(I do hate how the SEC has acted in the crypto space, especially since Gensler took over.)

2. I do not own XRP, so I personally don't care what happens to its price. My interest in this case (and the LBRY case) is geared towards what this means for the crypto space at large.

With that done:

Over the weekend, both Ripple Labs AND the SEC both applied for summary judgment in their court case. Both sides basically think the facts in the case are fairly clear ("no genuine dispute as to any material fact"), and the judge has enough information to make a decision without the need to go to a lengthy, expensive trial.

If you aren't aware of the YouTube channel Legal Briefs, lawyers Thien-Vu and Jeremy Hogan have provided updates on this case. In their latest video Jeremy breaks down the contents of these briefings.

WARNING: I'm going to spoil parts of the video, so you should pause reading here if you want to watch it without my summarizing and two-cent commentary.

The SEC's brief is pretty straightforward in its argument: Ripple's sales and marketing of XRP met all the prongs of the Howey test, therefore meeting the definition of an "investment contract," therefore meeting the definition of a security.

As for Ripple Labs' brief? If you've followed the case over the last few months/years, it seems like Ripple's defense centered around two things:

1. The 2018 Hinman "Ethereum is sufficiently decentralized" speech and why that makes ETH not-a-security yet doesn't apply to XRP.
2. Ripple's Fair Notice defense. This defense claims that it would not be obvious to reasonable people that Ripple's actions are a violation of the applicable statute (the Securities Act of 1933).

For the first... well, we still don't know why ETH doesn't count but XRP does. Heck, the SEC can't even agree on how to treat the Hinman speech itself! And for the second, the judge has already denied the SEC's attempt to strike this defense. These seem like promising paths to push, but Ripple's lawyers went in a much different direction.

At the time I write this Ripple's actual motion isn't available on crypto-law.us, and I am not a lawyer so I probably wouldn't understand half of what's written there anyway. But fortunately Jeremy has read the motion and breaks it down for us.  Rather than rehash everything he said, here's a quick summary.

• Precedent states that "investment contracts" must have a legal obligation on behalf of the seller post-sale to the buyer. Otherwise, what is being sold is merely an asset.
• Therefore, in order for sales of XRP to count as sales of a security, Ripple Labs must have a legal obligation to XRP's buyers to do something post-sale.
• If you bought XRP from Ripple, did they promise you something? And if they did, is that promise legally enforceable?
  To paraphrase Jeremy's example, if Ripple completely trashes XRP and moves to XLM, what can you do about it? If your answer is "nothing, I have no legal recourse" then they have no legal obligation, which means there is no investment contract.
• Which means XRP was NOT sold as a security.

Ladies, gentlemen, and degens, think about that for a moment. Think about the LBRY case and damn near every other cryptocurrency out there. How many of these digital assets were sold with legal obligations attached from the seller? Not any I can think of right now. So what would this ruling mean for all of them? That's right, this could possibly strip the SEC of jurisdiction of 99.9% of cryptocurrencies because they wouldn't BE securities.

Now, this is not a fait accompli. I believe the SEC will have a chance to respond to the motion (I think, once again I am not a lawyer), and there's no guarantee the judge will rule in favor of Ripple. But. BUT. Ripple's new line of attack and its implications is huge for the crypto space. Maybe crypto will be more reasonably regulated under the CFTC instead. Maybe this drives updated legislation since the Securities Act of 1933 doesn't fit digital assets very well (gee, you think?). Maybe, maybe...

Can you imagine a crypto world without Gary Gensler and his "regulation by enforcement" b.s.?

Again, the meat of this content comes from the excellent Legal Briefs YouTube channel.  If you were wondering about the hilarity that are the SEC's attempts at shielding the Hinman speech or other missteps in this case, go there.  Seriously, go check it out!