In a surprising turn of events, an overlooked footnote in a Ripple legal document has emerged as a potential game-changer in the ongoing legal dispute between Ripple and the United States Securities and Exchange Commission (SEC).
Pro-XRP lawyer John Deaton took to Twitter on May 22 to reveal the significance of this footnote, stating that it confirmed discussions about XRP within the SEC before the Hinman speech.
The SEC’s initial legal action against Ripple in December 2020 accused the company of conducting an unregistered securities offering through the sale of its cryptocurrency, XRP. Ripple has vehemently denied these allegations, arguing that XRP does not meet the criteria of security as defined by the Howey Test.
The revelation of the footnote, believed to originate from a third party external to the SEC, 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,” has significant implications.
It suggests internal debates within the SEC regarding the classification of XRP and could potentially sway the outcome of the lawsuit.
During a recent Twitter Spaces session hosted by Fox Business journalist Eleanor Terrett, Deaton emphasized the importance of the revelation, noting that it confirms what XRP holders have long believed.
He also pointed out that the SEC has not officially commented on whether XRP was internally discussed, but it appears that someone within the SEC may have considered treating XRP similarly to Bitcoin and Ethereum, both of which were deemed not to be securities in Hinman’s Speech.
Deaton further highlighted the differences in the citations, with the XRP-related document labeled “SEC-LIT” while other emails were referred to as “SEC-PROD.”
This detail, he argued, indicates that the statement about XRP not satisfying the Howey Test was not a direct quote from a senior SEC official.
The XRP community eagerly awaits June, when the Hinman materials are expected to be unsealed, hoping to gain further insights into the extent of this newly revealed information’s impact on the case.
As the Ripple vs. SEC battle intensifies, the outcome of this lawsuit could have far-reaching consequences for the broader cryptocurrency industry and its regulatory landscape
