John Deaton, the attorney representing over 75,000 XRP Holders in the SEC vs. Ripple lawsuit, recently took to X to comment on a 2018 memo related to the non-security status of XRP.
Based on the information we could gather about the memo, it was dated 2018. It contains assertions from the United States Securities and Exchange Commission (SEC) lawyers, seeking to justify XRP as a security in 2018.
At the time of reporting, details about the memo were scanty. However, Judge Sarah Netburn revealed that the SEC lawyers did not come out with legal action against Ripple. So, the fact that there were no recommendations of a lawsuit from the SEC’s attorneys as of June 13 2018 suggests the memo did not conclude that XRP was a security asset.
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Deaton’s Response Misunderstood – Clarifications
While it seems as though the whole fuss about the memo is going down, a new discussion surfaced over the weekend where an XRP enthusiast called out Deaton for relaying that the notice did not confirm that XRP satisfied the prongs of Howey.
In response to the XRP user’s claim, Deaton noted that he never made such statements. “To be clear, I didn’t say the memo concluded XRP is not a security,” Deaton remarked.
Elucidating further, the Crypto-Law founder maintained that the memo is still privileged, implying that he has yet to grasp the full details of the message.
An extract from Deaton’s response went thus, “But Judge Netburn found it important to note that the authors of the memo, who were Enforcement lawyers at the SEC, did NOT recommend any action be taken. Thus, the memo did not conclude that XRP is clearly a security as of June 13, 2018, or there would’ve been a recommendation for enforcement or some action.”
To be clear, I didn’t say the memo concluded XRP is not a security. The memo was found to be privileged and not disclosed so I haven’t read exactly what it says. But Judge Netburn found it important to note that the authors of the memo, who were Enforcement lawyers at the SEC,…
— John E Deaton (@JohnEDeaton1) August 27, 2023
Read Also: How Ripple Can Sell XRP for ODL In U.S. Without Breaking Securities Law? Deaton Explains
Deaton Hints At A Significant Observation
Corroborating his claims, Deaton noted that it is unlikely that the SEC confirmed XRP sales to be securities in 2018 and still allowed its unrestricted transactions.
In addition, Deaton remarked that the SEC could not classify XRP sales as securities; how then does the commission expect Ripple executives to know that they have been breaching security rules since 2013?
Meanwhile, both Ripple and the SEC have obeyed the court order by submitting blackout dates for the upcoming trial. It is left to see how it plays out in the long run.
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