Attorney John Deaton Shares Crucial XRP and Coinbase Recap

Prominent pro-crypto attorney John E. Deaton has published a detailed response to Coinbase Institutional’s recent announcement regarding its move to offer regulated XRP futures contracts.

The exchange stated it had “filed with the CFTC to self-certify $XRP futures—bringing a regulated, capital-efficient way to gain exposure to one of the most liquid digital assets.” The platform further noted that it anticipates the contract to go live on April 21, 2025.

Coinbase’s Legal Due Diligence in 2019

In a lengthy post, Deaton provided extensive context around Coinbase’s history with XRP, its interactions with the U.S. Securities and Exchange Commission (SEC), and the implications of Coinbase’s decision to offer XRP derivatives under Commodity Futures Trading Commission (CFTC) oversight.

His post emphasized that Coinbase’s decision to list XRP in 2019 was based on legal analysis conducted by its in-house counsel, some of whom he described as among the most experienced securities attorneys in the country.

Deaton stated that in January 2019, before listing XRP, Coinbase approached the SEC to inform them of its internal conclusion: XRP did not meet the definition of a security under U.S. law. Coinbase shared with the SEC that this determination was based on their application of the exchange’s digital asset framework.

According to Deaton, the SEC was fully aware of XRP’s history at that point, including its settlement with the Financial Crimes Enforcement Network (FinCEN) in 2015. That agreement resulted in detailed audits of all XRP sales between 2015 and 2020, shared with FinCEN and the SEC.

The XRP Howey Memo and SEC Inaction

Deaton underscored the significance of an internal SEC document known as the “XRP Howey Analysis Memo,” which he said was authored by SEC enforcement staff and dated June 13, 2018—just one day before former SEC Director William Hinman’s widely discussed speech declaring that Ethereum was no longer considered a security.

According to Deaton, the XRP memo did not recommend enforcement action or a cease-and-desist order, which he interpreted as a signal that the SEC staff at the time did not conclude that XRP was a security.

At the January 2019 meeting, Coinbase reportedly made it clear to the SEC that it intended to list XRP unless the agency explicitly disagreed with the exchange’s analysis.

Deaton asserted that the SEC neither raised objections nor attempted to dissuade Coinbase from listing the asset. XRP was listed on February 26, 2019, and shortly afterward, Coinbase promoted XRP and USDC as a cost-effective solution for cross-border payments.

SEC Enforcement and Legal Fallout

Deaton pointed to the contradiction between the SEC’s silence in 2019 and its decision nearly two years later to file suit against Ripple Labs and its executives on December 22, 2020. He emphasized that the SEC’s complaint took the unprecedented position that all XRP, regardless of its origin or acquisition method, constituted unregistered securities.

In Deaton’s view, the agency’s approach constituted bad faith and overreach. He also highlighted that over 75,000 XRP holders joined the lawsuit as amici curiae. He credited Judge Analisa Torres’s July 2023 ruling, which found that XRP was not a security, as vindication for retail holders, Coinbase, and Ripple. That decision led to Coinbase and other platforms re-listing XRP within hours.

XRP Futures Under CFTC Oversight

With Coinbase actively pursuing a CFTC-regulated XRP futures product, Deaton sees the move as a culmination of a years-long battle. He described the development as a reflection of XRP’s legal clarity,

particularly as a non-security asset in the secondary market. Referring to the years of litigation, regulatory uncertainty, and the cost imposed on stakeholders, Deaton concluded his post with a pointed remark: “Imagine the massive waste of money, resources and time. But we won.”

Coinbase’s filing to self-certify XRP futures with the CFTC marks a significant development in the broader regulatory narrative surrounding XRP. While the product remains subject to approval, its path to listing under the oversight of the CFTC, not the SEC, underscores the continuing evolution of XRP’s regulatory status and market positioning.

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