Ripple vs. SEC: A Footnote That Could Shift the Balance

The Ripple and SEC Saga

Since the SEC launched its case against Ripple back in December 2020, claiming the offering of XRP was an unregistered securities event, the courtroom drama has unfolded like a gripping legal thriller. Ripple, however, has taken a swing at the SEC’s claims, insisting that XRP doesn’t measure up to the Howey test—essentially a legal litmus test for securities.

John Deaton’s Discoveries

Fast forward to this year, and lawyer John Deaton, an outspoken advocate for XRP, made an eyebrow-raising discovery in Ripple’s 2022 legal documents. An unassuming little footnote, previously overlooked by most, suggested that SEC staff had a chat about XRP prior to the infamous Hinman speech—a speech where former SEC director William Hinman asserted that Bitcoin and Ethereum were not securities.

A Heightened Legal Drama

Deaton took to Twitter, and as one might imagine, Twitter users clung to his words like a life raft in a sea of legal jargon. He pointed out that while the majority of SEC-related emails in Ripple’s opposition were redacted, this specific footnote—suggesting there are reasonable grounds to conclude that XRP does not satisfy all elements of the Howey analysis—was presented in plain sight.

• “Reasonable grounds to conclude that XRP does not satisfy the Howey analysis” – now that’s an eyebrow-raiser!

Implications of the Footnote

If this piece of information is any indication, there may have been considerable internal debate at the SEC about whether XRP should even be classified as a security. Deaton commented that the footnote could meaningfully contribute to Ripple’s defense, as it shows differing viewpoints even among SEC officials.

What Could This Mean for Ripple?

Given that the SEC has generally kept its cards close to its chest on internal discussions, Deaton’s find may be just the crack in the facade that Ripple needs. He emphasized that someone outside the SEC likely penned the footnote, arguing that if it were a senior SEC official, it would have been redacted, thus raising the stakes for the ongoing litigation.

Looking Forward

As the saga continues, all eyes are on June 13. That’s when the Hinman papers are set to be unveiled, potentially revealing even more about the internal SEC considerations regarding XRP. Just imagine the courtroom chatter if Ripple has a strong ace up its sleeve!

The Broader Picture

For those invested in XRP, it’s a tense but exhilarating time. Deaton sums it up brilliantly, stating that the community has been anxiously cheering for some affirmation that XRP had been discussed internally at the SEC, and it seems like they might just get it. Buckle up, everyone! This legal rollercoaster might just have a few surprises left.