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A Key Discovery by Pro-XRP Lawyer
Pro-XRP attorney, John Deaton, has detected a minor footnote in a Ripple brief. This revelation indicates that XRP was a subject of discussion within SEC staff before the Hinman speech was delivered.
An overlooked footnote in a Ripple rebuttal document last year may influence the ongoing dispute between Ripple and the U.S. securities regulator, as per John Deaton, an attorney strongly backing XRP.
XRP: An Earlier Discussion Point Within the SEC?
On May 22, Deaton took to social media platform Twitter, shedding light on a brief footnote in a Ripple legal dossier, which he had recently uncovered. This note validated that XRP was indeed a topic of conversation among SEC personnel before the Hinman speech was delivered.
This could be a vital point as internal discourse among SEC authorities over the categorization of XRP - whether it's a security or not - could potentially sway the course of the persisting lawsuit between the U.S. Securities and Exchange Commission (SEC) and Ripple.
The SEC initiated litigation against Ripple in December 2020, alleging that Ripple's sale of its cryptocurrency, XRP, constituted an undeclared securities offering.
Ripple has persistently refuted that XRP is a security, claiming it fails to meet the criteria of the Howey Test, which is employed to determine if a transaction qualifies as a securities transaction.
The Significance of the Footnote
The footnote, which Deaton surmises originates from a third-party unaffiliated with the SEC, read:
"There are reasonable grounds to conclude that XRP does not satisfy all elements of the Howey Analysis and is therefore not a 'security' for the purpose of federal securities laws."
In a May 22 Twitter Spaces, moderated by Fox Business reporter Eleanor Terrett, Deaton contended this "unequivocally states" that XRP was a point of discussion, as "someone at the SEC cited this person saying it is not a security, or they circulated the email within the email thread."
Deaton expressed his confidence in the statement. While he mentioned that the SEC "left no comment on record" about any internal discussion regarding XRP, he reiterated that back in June 2018, XRP was the third largest crypto asset, following Bitcoin and Ethereum.
In Hinman's Speech, Bitcoin and Ethereum were declared not securities, and Deaton posited that "it appears some at the SEC might have believed XRP should be treated similarly to Bitcoin and Ethereum."
Deaton mentioned, "Someone shared that market participants did not believe XRP was a security," adding, "Every assertion an XRP holder has been making for the past few years has indeed been verified by the discussion about XRP."
Deaton signaled to Cointelegraph that the conspicuous giveaway was its citation, "SEC-LIT," whereas other emails mentioned were cited as "SEC-PROD."
He elaborated that these documents are "the Hinman emails and speech drafts," which the SEC resisted providing, but were nonetheless mandatory to be produced for the litigation.
The Road Ahead
Deaton predicted that we should closely watch June 13, when "we will discover the extent to which" this will affect the case. That's when the Hinman materials will likely be disclosed.
