Ripple-SEC Case: Two Legal Memos Unsealed Show That XRP Does Not Constitute a Security

According to the latest development in the case between Ripple, the US-based cross-border payment firm, and the United States Securities and Exchange Commission (SEC), two legal memos have been unsealed and they show that XRP does not constitute a security.

The latest development was shared by the defense lawyer and former federal prosecutor, James K. Filan, via his Twitter handle a couple of hours ago.

In a series of tweets, the defense lawyer summarized the content of the two legal memos and concluded that Ripple made lots of efforts in the early days to keep XRP away from the SEC’s regulatory hammer.

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James K. Filan tweeted, “#XRPCommunity #XRP #SECGov v. #Ripple #XRP BREAKING: BELOW ARE THE TWO LEGAL MEMOS THAT HAVE NOW BEEN UNSEALED.”

In a series of tweets, the defense lawyer narrates as follows:

“Overall favorable to Ripple and the Individual Defendants. Both memos are from Perkins Coie. The first memo was prepared in February 2012 and sent to Jed McCaleb and Jesse Powell. It says that if NewCoin is sold in what now would look like an ICO (I didn’t see the term ICO used), it would be likely that it would be considered a security. But Ripple then revised its business plan and went back to Perkins Coie, which issued a second memo in October 2012. This second memo was sent to Chris Larsen and Jed McCaleb.

“The October memo was more positive and while it said that there was a “small” risk that the SEC could disagree, Perkins Coie concluded that Ripple Credits should not be considered securities. The memo also suggested steps Ripple could take to minimize the risk that the SEC would disagree with Perkins Coie.

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“The memos cover the full landscape of legal issues (not just the issue of securities) and I think show how careful Ripple was trying to be. Also, this was 5 years before the SEC really even started talking about digital tokens would disagree with Perkins Coie.

“It seems to me that Ripple was being very proactive, which is very important. There certainly is nothing in these memos that suggests that Ripple was being reckless or ignored any substantial risks. In fact, the memos suggest the opposite – that Ripple was being careful.”

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