Lawyer John Deaton, now a well-known person XRP fan, recently made a striking discovery. He found in the footnotes of a document a curious comment about the status of XRP. The footnotes refer to an email correspondence within the SEC suggesting that XRP does not meet all the requirements of a security.
XRP and the Howey Securities Test
The lawsuit between the US Security and Exchange Commission (SEC) and Ripple has been going on for years. According to the US financial watchdog, XRP is an unregistered security, or effects. Companies in the US are not allowed to issue securities without the approval of the SEC.
Read this short 🧵 please. When you look at all the other SEC-LIT-EMAILS cited in Ripple’s opposition, they are redacted. The one about there being reasonable grounds to not believe XRP satisfies all the Howey factors is not redacted. https://t.co/qoaCbjk7rg pic.twitter.com/Nc6kfNMJ4c
— John E Deaton (@JohnEDeaton1) May 21, 2023
It is not entirely clear who wrote the footnote, it was initially speculated that it would be an attorney at the SEC. He or she seems unconvinced that XRP meets all the criteria to be labeled as a security:
“There are reasonable grounds for concluding that XRP does not meet all elements of the Howey analysis and is therefore not a ‘security’ within the meaning of national securities laws.”
According to the footnote. Deaton wonders why Ripple doesn’t use this in the lawsuit. He concludes, however, that it may not be a statement from the SEC itself, but from an independent market participant. That may also be the reason why the message was not edited or used in the lawsuit.
The Hinman documents
Last week some good news appeared for the Ripple camp. Judge Analisa Torres, who is hearing the case, ruled that certain sensitive documents will not be sealed. The SEC recently requested this.
It concerns the ‘Hinman documents’, referring to the aforementioned William Hinman. He claimed, among other things, in 2018 that ethereum (ETH) is not a security. The judge’s ruling means that she will take the documents into account when formulating her final ruling. At first glance, this is great news for Ripple. Deaton, of course, believes in a “total win” for Ripple.
