• Pro-XRP lawyer John Deaton noticed a small footnote in Ripple’s brief that discusses XRP among SEC staff before the Hinman speech.
• The footnote suggests that there are reasonable grounds to conclude XRP does not satisfy all elements of the Howey Analysis and is not a security.
• Deaton believes this confirms that discussions about XRP were had between SEC staff prior to the Hinman speech.
SEC Lawsuit Against Ripple
The United States Securities and Exchange Commission (SEC) has taken legal action against Ripple, alleging that its sale of XRP token represented an unregistered securities offering. Ripple has denied that XRP is a security, arguing it does not satisfy the Howey test which assesses whether a transaction meets the criteria of a security.
Pro-XRP lawyer John Deaton recently eagle-eyed a small footnote in Ripple’s opposition brief from 2022 which could play a role in the ongoing battle between the SEC and Ripple. He took to Twitter on May 22, explaining that this short footnote suggested internal debates between SEC officials over whether XRP is a security prior to the Hinman speech in June 2018.
The footnote states: “There are reasonable grounds to conclude that XRP does not satisfy all elements of the Howey Analysis and is therefore not a ‘security’ for purposes of the federal securities laws.”
Deaton argued this “clearly states” that XRP was discussed because “somebody at the SEC cited this person saying it is not a security, or they forwarded the email within the email chain.” He believes this proves what many have thought – discussions about XRP were had between SEC staff prior to Hinman’s speech.
While no comment has been made by official sources, Deaton’s discovery could be significant in determining how future proceedings will unfold with regards to Ripple and its native asset, XRP.