Thread by @JohnEDeaton1

A @SECGov 🆚 @Ripple 🧵

For the first time ever in a non-ICO case, the @SECGov is asserting that the digital asset itself - #XRP - is a security.

That absurd argument not only violates common sense but it’s in direct contradiction of over 70 years of case law and precedent.

https://twitter.com/mackattackxrp/status/1424383513206349826

In the #Howey case in 1946, there were two contracts in play between the investors and the W.J. Howey Co:

(1) a purchase and sale contract for the Orange 🍊 Groves;

(2) the investors signed a service contract hiring Howey to handle everything (from planting thru selling).

The Supreme Court found that the entire “scheme” taken together constituted a securities offering.

The Supreme Court NEVER said or implied that the oranges 🍊 were securities.

73 years later in 2019, the SDNY handed down the #Telegram case.

Telegram was a typical ICO case.

Truth be told, the Telegram case is strikingly similar to #Ethereum. In Telegram, they sold #Grams and intended to use the funds raised to design and build the blockchain. The @SECGov sought a preliminary injunction and won.

There are two written decisions by Judge Castel.

I encourage anyone interested to read them. They can be easily found at the @CryptoLawUS website in our document library.

These two decisions, along with #Howey, are 💯 in favor of #XRPHolders’ argument that today’s #XRP IS NOT a security.

J. Castel made it crystal clear:

“Cryptocurrencies are a lawful means of storing or transferring value and may fluctuate in value as any commodity would. In the abstract, an investment of money in a cryptocurrency utilized by members of a decentralized community connected via blockchain technology, which itself

is administered by this community of users rather than by a common enterprise, is not likely to be deemed a security under the familiar test laid out in Howey. The SEC, for example, does not contend that Bitcoins transferred on the Bitcoin blockchain are securities.”

Judge Castel went on to declare that the #Gram itself was not the security but only “alphanumeric code.”

If there was any doubt after the first #Telegram decision, that doubt was completely eliminated after Judge Castel authored his second Opinion & Order in #Telegram2.

In the second Order, the Court stated:

“the “security” was neither the Gram Purchase Agreement nor the Gram but the entire scheme that comprised the Gram Purchase Agreements and the accompanying understandings and undertakings made by Telegram.”

It doesn’t get any clearer!

The people that hate #Ripple or how #XRP was first created need to get past their bias and contempt.

If the #SEC was only alleging that the way #Ripple marketed and sold #XRP is what made it a security I would’ve never filed a motion to intervene on behalf of #XRPHolders.

What the #SEC is alleging threatens all of Crytpo including #Ether. Plus, the #SEC’s claim that the token itself is the security violates case law from 1946 to 2019.

It is absurd that the #SEC is arguing that the token itself is the security. Even @HesterPeirce made this point.

Hester herself stated in the interview on @ThinkingCrypto1 that she is trying to get the #SEC away from viewing the token itself as the security.

It’s both bizarre and scary to hear that this is how the #SEC views digital assets.

Watch for yourself 👇

I cited Tony’s @HesterPeirce interview in #XRPHolders’ motion to intervene. I did so because of how ridiculous the #SEC’s claim is.

The #SEC claims that today’s #XRP which has been traded on over 200 exchanges for the last 8 years is itself a security even though @Ripple

“controls less than 4% of all validators on the network, which gives them no power whatsoever on the XRP Ledger.”

The above quote is credit to @panosmek who destroys all the misconceptions of #XRP and the #XRPLedger below.👇
panos.writeas.com/why-xrp-is-the…

In #Telegram when you read the Court’s explanation of how a decentralized cryptocurrency doesn’t meet the Howey test then you realize that calling today’s #XRP itself a security is the same as calling the oranges 🍊 securities, and you come to the one burning 🥵 🔥 question 🙋‍♂️:

Why? Why would the @SECGov argue that today’s #XRP itself is a security per se when that argument violates the truth, common sense, and SEVEN DECADES of securities’ caselaw.

As for the answer:

I can offer you 55 billion reasons why!