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John E Deaton Profile picture
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31 Dec 21, 4 tweets, 2 min read
What makes the 2015 #FinCEN and @Ripple settlement even worse is that the SEC & FinCEN had entered into an agreement to share info w/ the other about companies investigated. In 2006 Chairman Cox said:“We are pleased to formalize our already strong working relationship w/ FinCEN.”
“The SEC and FinCEN will meet regularly as part of the agencies’ continuing efforts to improve anti-money laundering and anti-terrorist financing compliance.”

When Ripple settled, the SEC was well aware of the settlement & the details regarding XRP sales.
fincen.gov/news/news-rele…
Look at the details of the settlement.👇
“Any sale or transmission of XRP by Ripple or any of its subsidiaries shall be conducted only through an entity registered with FinCEN.”

SHALL & ONLY are are legally binding words. 👇

justice.gov/sites/default/…
So how can the SEC bring a lawsuit against Ripple 5 years later over the same #XRP sales Ripple already paid a fine for? B/c the agreement also reads:

“This agreement is binding upon the Company and the Government but specifically does not bind any other federal agencies …..”

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More from @JohnEDeaton1

John E Deaton Profile picture
1 Jan
WRIT OF MANDAMUS - A One year later 🧵 -

A year ago today, I filed a rarely used legal action 🆚 the @SECGov - a Writ of Mandamus. Mandamus is a judicial remedy in the form of a Court order to any gov’t employee to do some specific act which he/she is obliged under law to do.
Like I said, its a legal remedy that’s not often sought. In fact, according to the DOJ website: “Mandamus is an extraordinary remedy, which should only be used in exceptional circumstances of peculiar emergency or public importance.”
After reading the 79 page Complaint twice, I realized #XRP itself (ie today’s token) was being attacked by the SEC and I knew what that meant for innocent #XRPHolders. I believed this case was one of those “exceptional circumstances of peculiar emergency or public importance.”
Read 25 tweets
John E Deaton Profile picture
28 Dec 21
@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 21
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
Read 5 tweets
John E Deaton Profile picture
27 Dec 21
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 21
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 21
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

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