Deaton Unearths a Ripple Footnote that May Impact SEC Lawsuit
An overlooked footnote in a Ripple opposition brief could have significant implications in the ongoing litigation between Ripple and the U.S. Securities and Exchange Commission (SEC), as highlighted by pro-XRP lawyer John Deaton.
A Tweet Triggers a Debate
On May 22, Deaton caused a stir on Twitter, revealing that a short footnote in a Ripple legal document confirmed XRP was indeed discussed among SEC staff before the much-debated Hinman speech. This revelation could potentially be a game-changer in the ongoing lawsuit between the SEC and Ripple, tilting the scales in the latter’s favor.
SEC’s Stance on Ripple and XRP
In December 2020, the SEC took Ripple to court, alleging that the sale of its cryptocurrency, XRP, constituted an unregistered securities offering. Ripple has consistently denied these allegations, asserting that XRP does not satisfy the criteria of the Howey Test, a standard used to determine whether a transaction qualifies as a securities transaction.
The Significance of the Footnote
The critical footnote, which Deaton believes originates from a third-party source outside the SEC, suggested that XRP might not satisfy all elements of the Howey Analysis and therefore does not qualify as a ‘security’ under federal securities laws.
A Closer Look at the Ripple-SEC Case
During a Twitter Spaces session on May 22, Deaton argued that the inclusion of the statement in the internal emails clearly indicates that XRP was discussed within the SEC. Furthermore, he expressed confidence that the assertion does not directly originate from an SEC official, but still signifies important news for the litigation.
Reflecting on the Past: Hinman Speech and XRP
Recalling the Hinman Speech from June 2018, Deaton pointed out that it was stated that Bitcoin and Ethereum were not securities. Deaton suggests that some SEC officials might have believed that XRP should be treated the same way. This, according to Deaton, confirmed what XRP holders have been saying all along – that XRP was indeed discussed among SEC officials.
What’s Next in the Ripple-SEC Case?
Deaton advised the crypto community to keep a close eye on developments in the case, especially around June 13, when the materials related to the Hinman speech are likely to be unsealed. It is then that the true impact of this revelation on the Ripple-SEC case will become clear.
