Thread by @JohnEDeaton1

WHY THE SEC v. RIPPLE CASE IS THE MOST SIGNIFICANT @SEC_Enforcement CASE IN MODERN HISTORY: Part 1

In 1946 the U.S. Supreme Court handed down the seminole case of SEC v. Howey. For 75 years that case has basically set the standard in determining what constitutes a security.

The underlying asset in Howey was orange groves. The groves were plots of land that were sold to tourists. The investors purchased the lots of land, but also paid the seller money to manage the orange groves. The seller would plant the seeds, water the trees, harvest the

oranges and then sell the oranges to people and places, and the investors would share in the profits. The Supreme Court laid out a four-factor test that is now called the Howey Test in deciding whether an asset is an investment contract - also known as a security. The Howey Test

comprises of 4 factors and ALL 4 FACTORS MUST BE MET in order to classify the asset as a security. Those factors are: 1) a person must invest money; 2) in a common enterprise; 3) the person is led to expect profits; and 4) from the SOLE efforts of others. The Supreme Court, in

applying the 4 factors, concluded that the orange groves were securities because the investors did nothing. They never visited the land; never procured the trees; never took possession of the oranges; or did anything, except invest money and wait for profits. After Howey, there

have been a progeny of cases wherein the 4 factor test was applied. Some of the highlighted assets included oil drilling rigs, whisky barrels, 🦫 beavers and pay ☎️ phones. In all these cases, like in Howey, the investor gave money, sat back, and collected the profits. In all of

these situations the investors did nothing and relied solely on the efforts of the promotor or seller, so all the assets were deemed a security. Please think about this for a minute. One of the cases involving securities’ laws that we must apply in analyzing whether #XRP or other

Digital Assets constitute securities, involves facts and technology related to pay phones. When is the last time you used a pay phone? It’s insane and idiotic that innovative companies must guess and try to compare 🍊 groves , 🦫s and pay ☎️s to blockchain technology and digital

currency. We need Congress to act, but that’s like waiting for the ground to dry during a hurricane. We need Congressional action for not only providing clarity related to the digitalization of different assets, but also authorizing and/or limiting which federal agencies should

govern the use of digital currency. When Congress fails to act, we need leadership at @SEC_News to provide regulatory clarity. @Ripple has begged for such clarity for the last several years. Hell, @HesterPeirce is begging for it now. While executives like
decrypt.co/57691/sec-comm…

@bgarlinghouse @chrislarsensf @s_alderoty and @JoelKatz were pleading for regulatory clarity in the 🇺🇸 the last 3 1/2 years, the rest of the world joined the 21st Century as it relates to the digitalization of assets. The U.K.’s Financial Conduct Authority (FCA), unlike the

@SEC_Enforcement provides clear guidance to investors and businesses regarding crypto-assets and digital currencies. The FCA has stated that crypto fits into several brackets: a) a security token; b) a utility token; and c) an exchange token. A security token is like a stock

certificate or debt instrument. It provides title rights to a company. A utility token is designed for a specific purpose. An exchange token is traded on platforms for value in something. The FCA declared #XRP to be a “hybrid token” constituting both a utility and exchange token.

The FCA specifically determined that #XRP IS NOT a security token. In addition, Japan, Singapore, Switzerland and the UAE have all also declared #XRP to be a non-security. This is of great significance when you consider that over 80% of #XRP is traded OUTSIDE THE UNITED STATES.

Garlinghouse has stated that 95% of Ripple’s customers are OUTSIDE THE UNITED STATES. Its not like we can say this 20% of the circulating #XRP acts as a security, while the other 80% is a hybrid token acting as both a bridge asset utility token and/or an exchange token. It’s an

utter disgrace that Clayton, Acting Chair Herren Lee @SECEnfDirector and @SEC_Enforcement
waited 8 years to bring this incredibly significant enforcement action. Previously, I brought up the fact that @JedMcCaleb wasn’t sued. More important, the SEC hasn’t sought an injunction

to prevent him selling his billions of #XRP. If the SEC filed this case to protect investors, they wouldn’t let Jed continue his daily dumps of #XRP. Which means this enforcement action was brought for the improper motives that I’ve previously explored, or the SEC doesn’t know

how to deal with digital currencies and filed this case as a means to achieve regulation by enforcement. SEC vs RIPPLE IS THE MOST SIGNIFICANT SEC ENFORCEMENT ACTION IN MODERN HISTORY. Period! How do I know that? Let’s review only a few items. PayPal’s CEO Dan Shulman publicly

stated that digital currencies are the future of finance and money. PayPal announced that in 2021 it will allow for crypto assets to provide the funding source for retail purchases to it’s 28 million merchants. Recently, MasterCard went even further. 👇

https://twitter.com/Cointelegraph/status/1359876111593791494

After the need for relief caused by the Pandemic, CBDCs are the most significant financial topic in the world today. China’s President Xi has urged world leaders to support CBDCs. Japan accelerated a rollout of the digital Yen and CBDC.
Canada announced it will soon launch a

CBDC. The Bank of England says digital currencies may replace the banks’ role in payments altogether. The ECB said losing in the CBDC race will have significant consequences. PayPal’s CEO stated there is “no doubt people are flocking to digital currencies and CBDCs will be the

future and there is no doubt that CBDCs will be issued directly by CBs to people. A top Japanese Banker said digital currency development is the top priority and that Japan is behind China and South Korea. The Head of Russian Parliaments for financial markets stated that the

Crypto Ruble will start in 2021. Bank of America reported that the Federal Reserve will use digital dollars to unleash inflation, provide UBI and debt forgiveness. China has already created a CB-backed digital currency and has been using it for months in select Chinese cities.

Deutsch Bank released a report about China issuing the first CBDC and states that it is now a step closer to its goal of removing the USD as the world’s reserve currency. A top Russian banker declared SWIFT to be replaced by digital currencies. DBS, Singapore’s largest bank and

the 6th largest bank in the world declares #XRP is better and faster than SWIFT. Do you know how long SWIFT has been in power? What company has been the only company trying to replace SWIFT? Now why exactly did the SEC sue Ripple? THIS CASE HAS HUGE IMPLICATIONS.
Part 2 later.