John Deaton, the attorney representing XRP token holders in the U.S. Securities and Exchange Commission (SEC), raised new questions about a secret memo, which is a note from the then SEC appointed Counsel to William Hinman, the former director of the SEC’s Division of Corporation Finance.
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XRP Secret Howey Memo
The secret memo dates back to June 2018, when Ripple Labs CEO Brad Garlinghouse and CTO David Schwartz raised questions to Hinman former SEC Chair Jay Clayton. Deaton asked why was it that the document was not out in public if the SEC officials have argued that the sale of XRP was unregulated securities.
“How come the Howey memo isn’t an exhibit? How come Jay Clayton and William Hinman didn’t say XRP sale was clearly a security? Because at best the memo said XRP was given away by Ripple for a non-investment purpose.”
Deaton explained that the fact that XRP can be shown as not a security in many ways makes the Howey memo an important finding. The attorney argued that the memo would likely have suggested for the SEC that it was inconclusive but it may very well have suggested for Ripple that XRP was not a security and that it did not meet the Howey test conditions.
Judge Analisa Torres Agreed With Howey Argument
Deaton recalled that the judge Analisa Torres too had accepted that the XRP token sales did not meet the Howey Test. In this context, he said the XRP community would benefit of Clayton and Hinman are put to question before the Court. Also, the US SEC would like to conceal the memo as it potentially hurts them, he explained. The attorney asked why the agency would not reveal the document if it did not say XRP is a security.
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