SEC Emails Reveal XRP’s Possible Non-Security Status
Evidence suggests that XRP, the controversial cryptocurrency associated with blockchain company Ripple, may not meet the requirements of the Howey Test and may not be classified as a security.
This conclusion is based on internal emails from the U.S. Securities and Exchange Commission (SEC).
🚨NEW: A really interesting find by @JohnEDeaton1 in the footnotes of @Ripple’s Opposition and Reply Briefs.
It shows references to internal @SECGov emails conceding reasonable grounds that #XRP does not satisfy all elements of the Howey Test and is therefore “not a security.” https://t.co/R2zwWqjOrk
— Eleanor Terrett (@EleanorTerrett) May 21, 2023
These emails, referenced in Ripple’s opposition and reply briefs, were discovered by legal commentator John Deaton.
The emails, referred to as Exhibit 220, present arguments that indicate there are valid reasons to question whether XRP satisfies all the factors of the Howey Test, which determines the classification of certain transactions as investment contracts.
It is puzzling why Ripple’s legal team did not highlight the potential significance of these emails.
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Deaton, who thoroughly reviewed thousands of legal documents related to the case, overlooked this detail in the footnotes. The email citation was placed in a way that diverted attention from it, as it followed a sentence discussing analyses submitted to the SEC by independent market participants.
These analyses concluded that XRP was not a security. Deaton raised an interesting point regarding the lack of emphasis on this information by Ripple’s legal team.
He speculated that the quote might not be a direct statement from a senior SEC staff member but rather a reference made by an SEC official to another person’s analysis of XRP in the emails exchanged with Hinman, a former SEC official.