A tiny footnote in a Ripple brief, noticed by pro-XRP attorney John Deaton, ostensibly reveals that XRP was discussed among SEC employees prior to Hinman’s speech.
A crucial footnote from a 2022 Ripple opposition brief has been called out by pro-XRP attorney John Deaton, and it could have repercussions for the legal dispute between Ripple and the U.S. Securities and Exchange Commission (SEC). The footnote implies that XRP was discussed by SEC personnel before the contentious Hinman speech, which may be important information for deciding how to classify XRP.
The ongoing case has become even more complicated as a result of the disclosure that the SEC engaged in internal discussions about whether or not XRP qualified as a security. It implies that there might have been disagreements within the SEC on how to regulate XRP, which could have affected how the case turned out.
Uncertainty Surrounding XRP Classification and SEC’s Consistency
A key issue in the lawsuit is the SEC’s position on whether XRP counts as a security. The dispute is further fueled by this new information about internal SEC deliberations, which further raises concerns about the agency’s consistency and transparency in handling cryptocurrency.
The cryptocurrency community continues to pay careful attention to the Ripple litigation as it may have important ramifications for the overall regulatory environment.
The footnote, which Deaton believes comes from a third-party outside of the SEC, stated:
“There are reasonable grounds to conclude that XRP does not satisfy all elements of the Howey Analysis and is therefore not a ‘security’ for purposes of the federal securities laws.”
The Howey test, which is used to determine whether a transaction satisfies the requirements of a security, has been employed by Ripple to refute the claim that XRP is a security.