Thread by @JohnEDeaton1

From a significant @Ripple critic:

“I am, how you say, not a Ripple fan …. But from the day the SEC’s enforcement action against them dropped last fall, I’ve been rooting for them to prevail vs. the SEC because the case feels dirty, and it could set terrible precedent.”

https://twitter.com/messaricrypto/status/1468279210502500355

“We know from Ripple’s court proceedings that despite three years of meetings with company executives, the SEC never informed Ripple or its partners that the Commission believed the company’s digital currency, XRP, was a security until they initiated an enforcement action.”

“That alone is damning. I’m not a lawyer, but I know that baiting a company to engage over *three years* and then initiating a lawsuit with no prior warning is not a good way to craft policy around an emerging market.”

“Especially because unlike many other crypto tokens, XRP has actually been legitimately used for cross- borders payments as a bona fide currency.”

- @twobitidiot

The SEC isn’t limiting its allegations to include only sales of #XRP by Ripple. It absurdly claims secondary sales of #XRP by individuals or entities independent of Ripple are also unregistered securities. Its claiming the “very nature of XRP in the market” makes it a security.

Many crypto savvy people allowed their disdain for Ripple, it’s executives, or #XRP (I’m not sure how you hate a token) to blind them regarding the SEC’s gross overreach and egregious conduct. Why do you think the SEC sued @bgarlinghouse and @chrislarsensf?

Why did the SEC write paragraphs that read similarly to fraud allegations? It’s complete and utter noise meant to inflame the reader. It’s classic divide and conquer strategy. In fact, when the Complaint was first filed a lot of people claimed the executives were sued for fraud.

The truth is, there isn’t one allegation of fraud or misrepresentation contained in the Complaint. I don’t represent Ripple and I don’t defend Ripple. My focus is on #XRPHolders and secondary market sales of XRP - the Token itself.

In fact, @CGasparino and @EleanorTerrett reported “Deaton is certainly no Ripple fanboy.”

But the truth is that the @SECGov conducted a 30 month investigation into Ripple and its executives and didn’t find one chargeable instance of fraud or misrepresentation.

I watched experienced securities lawyers within the digital asset space say things like “Ripple and Brad are lucky the SEC didn’t charge them with fraud.” Do you really think the SEC decided to bring a case against them but not charge them with fraud if it could prove it?

Do you know how rare it is to independently charge the executives in a non-fraud securities violations case? Regardless, the SEC was successful in distracting the crypto community at large from its own unconscionable conduct by alleging fraud-like conduct in a non-fraud case.

The SEC was hoping people would ignore the fact that you could substitute #ETH, #XLM, #ADA, or even #BTC for #XRP in many of the allegations and the language would equally apply. For example, the Complaint alleges that all #XRPHolders are in a common enterprise with each other.

In a typical Section 5 securities violations case, the SEC would allege that on a specific date there was a transfer of an asset that constituted an unregistered securities offering. Instead, the SEC claims all sales and transfers of XRP from 2013 until today are illegal.

All sales! No matter who sold them. Even the Judge called the SEC lawyers out on this ridiculous theory.

The COURT:
“Presumably, under this theory then, every individual in the world who is selling XRP would be committing a Section 5 violation based on what you just said.”

Despite @twobitidiot’s personal opinion about Ripple and/or it’s executives, he did recognize the danger that this case poses to all of crypto. Do you?