The feud between the Securities and Exchange Commission (SEC) and Ripple (XRP) has been ongoing for the past several months now, however with the latest developments, could the end finally be in sight?
What we are talking about, is a fantastic response from Ripple’s legal team, which has effectively forced the SEC into an impossible-to-get-out-of bind. Attorney and known XRP supporter John Deaton has weighed in as well, further cementing the optimism within the Ripple community. Altogether, this all may just be enough to put a halt to the SEC’s crusade.
A quick refresher on the situation
The SEC vs XRP situation began in December when the US agency filed legal action against the FinTech firm (Ripple Labs) and its top executives. The action alleged that XRP was in fact a security, and that the firm had raised over $1.9 billion AUD through the sale of XRP in an unregistered securities offering since 2013. It also alleged that the firm had distributed billions of XRP in return for labour and other non-cash considerations.
This caused a chain of issues for Ripple, namely being delisted from exchanges like Coinbase, losing its third-place market capitalisation position and even being on the verge of dropping from the top ten.
Source: Tradingview
Understandably, many in the community began debating whether it was a signaller of Ripple’s end. Three months later, the answer to those concerns appears to be a resounding no.
Ripple’s fantastic legal counter
In a brilliant turnaround last week, Ripple managed to levy a ruling in which the SEC is forced to surrender an email containing a draft of a speech by former SEC director William Hinman. The speech in question incriminates Hinman stating that Ether was not a security, which then means XRP couldn’t be either, directly countering the basis of the SEC’s legal action.
This series of events began on 25th February, with the SEC attempting to withhold documents from Ripple’s legal team, citing that Hinman’s speech should be covered by the Deliberative Process Privilege (DPP, a common-law principle protecting internal processes from disclosure and discovery). However, this was overturned after Ripple pointed out that the SEC had earlier sworn Hinman’s speech was his own personal opinion, and thus the SEC can’t have it both ways by having it be a ‘personal view’, while still being protected as ‘agency policy’.
“The SEC’s Motion is an inappropriate attempt at a do-over simply because it is unhappy with the Court’s order on its prior briefing.”
Among the emails relating to Hinman, other documents containing internal SEC communications and policies were also required to be made available.
John Deaton sets the final nail
This latest chapter of the months-long feud was applauded by XRP advocates, with praise going towards Ripple’s legal team. John Deaton, a well-known XRP advocate and attorney sets the final nail in the coffin, stating that the commission has so far been unable to prove any wrongdoing from Ripple executives.
“There’s NO WAY the SEC can meet its burden. The SEC must prove the two executives had actual knowledge XRP was a security or was reckless in not knowing,” says John Deaton. It doesn’t end there, Deaton has also unveiled several new pieces of information that further incriminates SEC executives (Jay Clayton, former SEC chair, along with Hinman).
According to Deaton, Hinman and Jay Clayton (former SEC chair) were connected with key players high up within the Ethereum community. The implication of this is that SEC’s lawsuit against Ripple likely had ulterior motives linked to these Ethereum connections. Deaton explains this – and several other pieces of evidence – further in a video, confidently declaring: “Game Over For SEC”.
Source: Twitter
