Legal
Pro-XRP lawyer John Deaton has brought attention to a footnote in a Ripple legal document that he believes.
It confirms discussions about XRP within the U.S. Securities and Exchange Commission (SEC) prior to a significant speech. This revelation could have implications for the ongoing legal battle between Ripple and the SEC.
The SEC filed a lawsuit against Ripple in December 2020, alleging that the sale of XRP constituted an unregistered securities offering. Ripple has consistently argued that XRP is not a security, as it does not meet the criteria outlined in the Howey Test, which determines whether a transaction is considered a security.
According to pro-XRP lawyer John Deaton, a recently discovered footnote in a legal document related to the Ripple case suggests that discussions about XRP’s classification took place within the U.S. Securities and Exchange Commission (SEC). This particular footnote, which originated from an external third party rather than the SEC itself, states that there are reasonable grounds to view XRP as not satisfying the criteria for a security under the federal securities laws, based on the Howey Analysis. Deaton’s interpretation of this finding is that it implies internal deliberations within the SEC regarding XRP’s status.
During a Twitter Spaces conversation, Deaton expressed his belief that this footnote confirms what many in the XRP community had suspected all along—that XRP had been discussed within the SEC. SEC’s silence on internal discussions leaves room for speculation, as XRP’s position as the third largest cryptocurrency in June 2018, behind Bitcoin and Ethereum, suggests potential consideration within the SEC regarding its classification.
He suggested that some within the SEC may have considered treating XRP similarly to Bitcoin and Ethereum, both of which were deemed not to be securities in a speech given by William Hinman, a former SEC official.
Unsealed Hinman Materials Could Shed Light on XRP Discussions Within SEC
Deaton emphasized that the citation used in the document, “SEC-LIT,” indicated that it came from litigation emails, whereas other cited emails were labeled “SEC-PROD.” These emails were related to the Hinman materials and speech drafts, which the SEC had objected to producing but were required to be litigated.
It is worth noting that the statement in the footnote does not appear to be a direct quote from a senior SEC official, as it was not redacted. Deaton suggested that this implies the statement does not come directly from the SEC.
Deaton urged the XRP community to pay attention to June 13, as it is expected to be the date when the Hinman materials will be unsealed. This could provide further insight into the extent to which discussions about XRP within the SEC could impact the ongoing lawsuit between Ripple and the SEC.
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