Thread by @JohnEDeaton1

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.”

A writ of mandamus basically asks a Court to order an officer or an agency to properly fulfill their official duties or correct an abuse of discretion. I believed one year ago and still believe today that the SEC abused its discretion by making allegations it simply cannot prove.

The SEC may be able to prove that during the years between 2013-2017, when Ripple transferred XRP to a specific investor or entity, it involved a security. Any commodity can be offered, packaged, marketed or sold as a security. XRP, ETH, Gold or #BTC could be sold in such a way.

But what the @SECGov is arguing, in the @Ripple case, related to #XRP itself, is truly unconscionable. The SEC’s position is the equivalent of arguing the oranges 🍊 or the orange groves, themselves, were unregistered securities in 1946 in the Howey case. Candidly, it’s shameful.

The argument that the token itself is an unregistered security contradicts previous guidance, common sense, public policy, and violates 76 years of U.S. securities laws. The only conceivable scenario that the token itself could constitute the security is in a pure ICO offering.

In a pure ICO offering, there’s no functioning blockchain. Usually, all you have is a white paper and a promoter engaging in a crowd-sale fundraising event.

In an ICO, the token itself serves no function other than an investment. Therefore, one might argue the ICO token itself is an unregistered security. But even in the pure ICO offering, the Court has made clear the token itself - IS NOT the security.

In 2019, in the Telegram ICO case, Judge Castel from the SDNY (same Court as the Ripple case), explicitly stated the #Gram itself WAS NOT the security. The judge also made clear the #Gram Purchase Agreement itself WASN’T the scrutiny.

In other words, the signed written contract itself WASN’T the investment contract. Judge Castel noted that the #Gram itself was nothing more than “alphanumeric code.”

Why then is the SEC arguing that #XRP which, unlike #Gram or any other ICO, has been traded and utilized for over EIGHT YEARS, is itself a security?

Even Hinman’s #Ether free pass speech exempts the token itself.

The speech reads:

“Returning to the ICOs I am seeing, strictly speaking, the token – or coin or whatever the digital information packet is called – all by itself is not a security, just as the orange groves in Howey were not.”

Also, Chairman Clayton wrote a letter to Congressman Ted Budd and said:

“The analysis of whether a digital asset is offered or sold as a security is not static and does not strictly inhere to the instrument.”

Clayton also agreed that a digital asset may be offered and sold initially as a security because it meets the definition but may change over time if the digital asset later is offered and sold in such a way that it no longer meets that definition.

Yet, w/ XRP, the SEC argues XRP, including XRP traded in the secondary market independent of Ripple, are all securities from 2013 to today.

@HesterPeirce on @ThinkingCrypto1 told Tony that she was doing her best to get her colleagues away from viewing the token as the security.

It’s mind boggling when you listen to Hester explain how she must remind her colleagues that the oranges 🍊 were never the securities.

Because the SEC chose to ignore the truth, its own previous guidance, and the law, I filed the writ of mandamus one year ago today asking the Court to order the SEC to amend the Complaint to only allege what the SEC could actually prove.

It was an unconventional move and several lawyers on social media made fun of the writ and took shots at me for filing it. They argued the writ was bizarre and would never be successful.

But, today, I still believe in it. The SEC absolutely lacks the good faith to stand up and argue that the #XRP you or I purchased off Coinbase between February 2019 and January 2021 is an unregistered security.

Don’t forget, in January 2019, Coinbase, along with its sophisticated and experienced securities lawyers met with the SEC and informed the SEC that Coinbase determined 2019’s #XRP not to be a security and unless the SEC stated otherwise, Coinbase was listing #XRP the next month.

The SEC gave no reason for Coinbase to hesitate and on February 28, 2019, Coinbase listed #XRP and began actively trading it. But 22 months later, the Clayton / Hinman led SEC, despite their comments to the contrary, claimed all #XRP are securities.

As Clayton and Hinman stated, even if XRP started out meeting the definition of a security in 2013, 2020’s #XRP IS NOT 2013’s #XRP.

When I filed the writ of mandamus, I honestly hoped the SEC would do the right thing and amend the Complaint to only pursue Ripple’s use of XRP.

They refused. When I filed the motion to intervene I hoped they would stipulate to the Court that they were only pursing Ripple’s use of XRP. They refused. When I filed the writ of mandamus a year ago today, I never imagined 63K others from 100 countries around the 🌎 would join.

Every crypto holder, including Ripple / XRP haters, should be outraged over the SEC’s handling of this case. That’s why over 1,500 non-XRPHolders have joined the fight. As I’ve said, you don’t have to root for Ripple or it’s executives to recognize what the SEC is doing is wrong.