John Deaton, the lawyer representing over 75,000 XRP holders in the ongoing class action lawsuit against Ripple, the US-based cross-border payment firm, has highlighted potential damaging evidence against the United States Securities and Exchange Commission (SEC).
In a tweet about two days ago, Deaton said he found this information among the court documents in relation to the long-standing XRP lawsuit.
Read Also: Ripple CEO Brad Garlinghouse Sends Message to XRP Holders. Here’s What He Wrote
It should be noted that the Howey test, the basis of the SEC’s argument, was created by the Supreme Court to determine if an asset is a security based on whether or not investors expect to earn profits derived from others’ efforts.
Regarding the email, Deaton wrote:
“The SEC wanted all statements by SEC staff redacted and it appears they all were. What this tells me is that the statement about XRP not satisfying Howey is NOT a direct quote from a senior SEC official – otherwise it would be reacted.
“I’ve concluded that that statement was made by a market participant independent of Ripple, not the SEC, but it was referenced by someone in the Hinman emails, or the 3rd party email was forwarded to Hinman or the email group discussing the speech.
“I always want my comments to be based on facts, so I’m making this clarification. Although it isn’t a direct quote by an SEC official it is still damaging as hell because it demonstrates XRP was discussed. Someone at the SEC passed this XRP opinion to the email group for a reason.”
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
Recall that in 2020, the SEC filed a lawsuit against Ripple Labs, the major distributor of XRP, the 6th largest crypto by market cap, alleging it illegally sold the digital asset as an unregistered security. The lawsuit is pending, but Ripple looks forward to a summary judgment this year.
Read Also: Brad Garlinghouse States What Would Make Ripple Accept Settlement in XRP Lawsuit
Last week, US District Judge Analisa Torres ordered that documents relating to the much-discussed “Hinman emails” should be made accessible to the public.
The documents contain internal SEC deliberations about a speech delivered by former SEC official William Hinman in 2018 when he stated in his official capacity that he believed both Bitcoin (BTC) and Ethereum (ETH) are not securities.
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