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John E Deaton Profile picture
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27 Dec, 5 tweets, 2 min read
At a recent Congressional hearing @BrianBrooksUS testified “If I believe XRP is a security why don’t we allow it to be traded in the U.S.?”

It’s because the @SECGov ONLY allows accredited investors to buy unregistered securities.
“Accredited investors are allowed to buy and invest in unregistered securities as long as they satisfy at least one of the requirements mandated by the SEC. Of course, the requirements are based off income, net worth, asset size, governance status, or professional experience.”
“To be an accredited investor, a person must have an annual income exceeding 200K for the last two years with the expectation of earning the same or a higher income in the current years; or
A person is also considered an accredited investor if they have a net worth exceeding $1 million, either individually or jointly with their spouse; or
The SEC also considers a person to be an accredited investor if they are a general partner, executive officer, or director for the company that is issuing the unregistered securities.”

investopedia.com/terms/a/accred…

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More from @JohnEDeaton1

John E Deaton Profile picture
28 Dec
@JoeSquawk @andrewrsorkin @BeckyQuick
I know you’re aware that J. Clayton directed a lawsuit against @Ripple @bgarlinghouse & @chrislarsensf and alleged that the Token itself, #XRP, is a security. You’re aware of the mass exodus of the senior SEC staff behind the lawsuit.

1/7
2/7
You realize, if the @SECGov truly believes XRP is a security then every offer and sale is illegal and should be prevented. Why didn’t it seek an injunction to prevent Ripple, Brad or Chris from continuing to sell? Why didn’t it issue a cease & desist against the co-founder?
3/7
Are you aware that co-founder @JedMcCaleb has made over $2B dollars from sales of XRP - SINCE THE LAWSUIT WAS FILED?

That’s right: Jed has made more from sales of XRP in one year than what the SEC is seeking from the actual defendants in the lawsuit (the SEC seeks $1.3B).
Read 7 tweets
John E Deaton Profile picture
27 Dec
HOW Web3 & THE #ETHER FREE PASS WAS BORN:

Recently, @jack was blocked by @pmarca over Jack’s observation regarding the inherent interests of VCs related to Web3. What is Web3?

“Web3, much like other buzzwords you hear - Bitcoin, NFTs etc. - is based on blockchain technology.”
“As of now, most of it is based on the Ethereum blockchain. In fact, Ethereum co-founder Gavin Wood first coined the term Web3 in 2014. He now runs the Web3 foundation.” 👇
indiatoday.in/technology/fea…
Also in 2014, @gavofyork @VitalikButerin @ethereumJoseph @stevennerayoff and others orchestrated the World’s 🌎 first ICO (Ether). In 2017, Bill Hinman, as Director of Corporation Finance, arranged a meeting with Joe Lubin & @ConsenSys. That meeting took place December 13, 2017.
Read 25 tweets
John E Deaton Profile picture
22 Dec
A HOWEY TEST ANALYSIS 🧵:
ONE YEAR LATER

Does #XRP pass the Howey test?

In order to pass the Howey test and be considered an investment contract (aka security), 4 factors MUST be satisfied. If ALL FOUR factors are not met, the instrument or asset is NOT a security.
On the 1 year anniversary of the @SECGov lawsuit against #XRP, I offer an answer:

#XRP does not pass or satisfy the ​Howey​ test!

Before delving into the ​Howey ​analysis, #XRP is not an investment contract because there is no “contract” underlying the “investment contract.”
There’s not a single case in 76 years since Howey​ that has found an investment contract absent a contract or privity between the buyer and seller.
The vast majority of #XRP traded has occurred in the secondary market - independent of Ripple and w/ no privity to or w/ Ripple.
Read 25 tweets
John E Deaton Profile picture
19 Dec
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.”
“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.”
Read 15 tweets
John E Deaton Profile picture
17 Dec
CLAYTON’S @WSJ OP-ED IS SIMPLY UNBELIEVABLE

Clayton’s audacity is truly staggering. 🥴 As you read his @WSJ article consider the following:

1) Senator @MikeCrapo wrote a letter to both the OCC and to Clayton, while at the @SECGov, seeking clarity regarding Crypto PAYMENTS!
Senator Crapo stated that the different government agencies needed clear rules that do not stifle American innovation.

2) Weeks prior to the SEC enforcement action against @Ripple, several U.S. Congressmen wrote a letter to the SEC asking for regulatory clarity.
3) The Washington Examiner
publicized an INVESTIGATIVE piece on the issue of the United States losing the Blockchain technology war to China because of enormous uncertainty and because Clayton and the SEC refused to provide the necessary clarity.
Read 25 tweets
John E Deaton Profile picture
16 Dec
WHISTLEBLOWER ALERT 💥💥🧨:

@SundaySaucy deserves💰

I think Bill Hinman could’ve used some legal advice before signing the Sworn Declaration filed by @SECGov. If his speech reflected ONLY his personal opinion and was not guidance by the SEC, he is in violation of Title 5👇
“The Speech was intended to express my own personal views. To the best of my knowledge, the Commission had not taken at that time, and still has not taken, any position or expressed a view as to whether offers and sales of Ether constituted offers and sales of securities.” 👇👇
You can’t use public office for private gain:

“An employee shall not use his public office for his own private gain, for the endorsement of any product, service or ENTERPRISE, or for the private gain of friends, relatives, or persons with whom the employee is affiliated.”
Read 6 tweets

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