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.

Lets walk through the "Howey Test" with XRP ("Ripple"). This is why @SEC_Enforcement needs to come down like a ton of bricks on those behind Ripple the company…

XRP is a security, and as such Ripple Inc is committing securities fraud by not following the rules.

— Nicholas Weaver (@ncweaver) October 24, 2018

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.

#1: "Is it an investment of money?"

Hell yeah. People put their money in XRP, and literally call it an "investment". So lets check #1.

#2: "Is there an expectation of profits from the investment?"

Hell yeah.

— Nicholas Weaver (@ncweaver) October 24, 2018

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.

#3: "Is the investment of money in a common enterprise?"

Yes. The "Ripple network".

#4: "Do any profits come from the efforts of a promoter or third party?"

Well, yes, given although the XRP shills are loud, there are many investors who don't do the shilling…

— Nicholas Weaver (@ncweaver) October 24, 2018

In his last Tweet, the researcher took shots at Ethereum too.

In fact, basically any ICO not restricted to accredited investors where there is the quiet part of "yeah, this is for a 'product', but you don't want the product, you can sell the token to someone else" fails the Howey test.

Including Ethereum.

— Nicholas Weaver (@ncweaver) October 24, 2018

Notably, Dr. Doom, Nouriel Roubini also commented on the same issue tagging XRP as a non-compliant security. Roubini is one of the most vocal opponents of the crypto and blockchain technology.

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