Thread by @JohnEDeaton1

This Thread is meant to offer why I believe that Digital Assets and Cryptocurrency investors should be VERY concerned about the SEC enforcement action against XRP. Notice, I said XRP - not Ripple! I’m not here to defend Ripple or Garlinghouse or Larsen. Their lawyers can do that.

If the SEC had charged Ripple with the sale or distribution of unregistered securities in the form of XRP, in the early days, when XRP was ONLY connected to Ripple, with a limited use case, like it did with EOS/KIN, I wouldn’t have acted and I would still have 120 followers. 😂

But the SEC DID NOT limit the claim to early distributions made directly by Ripple or its executives. WHY NOT? Not a single case in the 74 years since the Howey Test was established has the Supreme Court found a security absent a contract or privity between buyers and sellers.

And if the SEC’s motive is ONLY preventing individuals from creating an asset and then potentially becoming trillionaires, why didn’t they name Co-founder @JedMcCaleb and others who own billions of XRP? WHAT IS THE INTENT of the SEC as it relates to the Digital Asset XRP?

If the SEC’s claim that TODAY’s XRP equals a security, under Howey, were to be UPHELD by the U.S. Supreme Court, then all other “ALT-COINS” that comprise the cryptocurrency market are equally securities. This includes ETH, which HAS NEVER “officially” been declared a non-security

In 2018, William Hinman, then the Director of the SEC’s Division of Corporation of Finance, implied that ETH was initially offered through a securities offering but was NO LONGER a security at the time (2018). The SEC’s enforcement division HAS NOT stated ETH is not a security.

Former CFTC Chairman Giancarlo has stated that he believes ETH is a commodity (like oil or gold). Giancarlo has also written on how XRP, like ETH, is not a security. But there has never been an official Declaration by the SEC that ETH is not a security.

So if you own ETH (I do) and you are celebrating or enjoying the SEC’s actions against XRP because you think it’s a shit coin or a banker’s coin or you dislike it’s executives, be careful what you ask or wish for, because YOUR coin could be next.

Every Altcoin was built by someone for financial gain. That person, group or entity reports some kind of venture, special utility or business that it hopes will increase the value of the coin. If the SEC is allowed to classify today’s XRP, held by retail investors, as securities,

then an entire flourishing and innovative industry is
in peril. @maxkeiser has recently claimed that the SEC will
now target all other altcoins.
Really? After all these years? Could Max be right? Let’s review: ETH was created by @VitalikButerin.

12 million ETH were created for 6 founders and the development of the Ethereum Foundation. 60 million ETH were pre-mined for participants to buy. The Ethereum Foundation was founded in 2014. In 2017, when ETH was near all-time highs in value, Vitalik persuaded the foundation to

sell 70,000 ETH, totaling, approximately, $100 million for the foundation. The Ethereum Foundation has helped ETH grow. Without the Ethereum
Foundation, ETH would be less successful. It was gifted ETH and it used it in order to fund
ventures to help promote itself and ETH.

@novogratz purchased
500K ETH and Vitalik commented that the foundation may not have survived were it not for that single purchase. Novogratz speculated that ETH would increase in value. He has
confirmed that, at times, he has sold some of his ETH for profit.

On at least one occasion, Vitalik
was able to get the major exchanges to stop trading ETH. The Ethereum Foundation’s early sales of ETH, and Vitalik’s actions in those early days, are not shining examples of decentralization. The SEC could make a colorable claim that

the original distributions of ETH to the founders and the ETH Foundation constituted securities just like they could claim against Ripple and its executives. But the ETH that exists today, are NOT securities. The XRP in 2013 IS NOT the XRP of today!

The point is not to take shots at Vitalik or ETH. I have a considerable amount of money invested in ETH. I’m only pointing out that, the SEC’s claims against XRP would have to equally apply to ETH and every other Altcoin in the
cryptocurrency market.

Former SEC Chairman Grundfest says the same thing that I am saying. He informed Jay Clayton that “XRP and ETH should be subject to the same treatment given that the SEC hasn’t illustrated a “material distinction” between the operation of ETH and XRP that is relevant to the
LAW.

Grundfest stated to Clayton in no uncertain terms that if the SEC imposes “security law obligations on XRP while leaving Ethereum untouched” then this “raises fundamental fairness questions about the exercise of commission discretion.”

So if the XRP in my wallet are Securities then the ETH in my wallet are Securities. There is no other objective legal conclusion. But the truth is that NEITHER my ETH or XRP are Securities and What Larsen or Vitalik did or didn’t do 5-6 years ago doesn’t change a thing.

And the mere fact that some investors may acquire XRP with the hope that it will increase in value does not transform XRP into a security. The same is true of BTC and ETH speculators. The same is true with baseball card speculators, gold speculators, or even art
speculators.

Grundfest recognized that this move by the SEC against XRP made no legal sense and called Clayton’s motives into question.
Why would Clayton or the SEC, after SEVEN years, of being publicly traded in the U.S. not just go after Ripple but XRP? My thread tomorrow will speculate.

If the Gov’t maintains its claim that Today’s XRP are Securities, then the non-XRP holders cheering should get off the bench and into the game. For my fellow BTC lovers, I don’t trust gov’t and there are scenarios that an overreaching Gov’t can come after BTC in limited

situations. For example, can “mining pools” be considered a common enterprise under Howey as @Santiag78758327 questioned in a recent post? Was a BTC foundation started similar to The ETH Foundation? See the slippery slope of government intrusion? Let all Crypto stand together.