Thread by @JohnEDeaton1

Last year @RoslynLayton brilliantly wrote:

“Put two and two together, and the SEC is saying that Ripple and its two top executives had to have reasonable knowledge of something seven years ago that the agency itself wasn’t sure about last Friday.”

forbes.com/sites/roslynla…

We all recently learned just how poetically accurate Dr. Layton was when she wrote that sentence last year.

Two pieces of critical evidence demonstrate her accuracy:

1) The October 2012 Perkins Coie Memo; and

2) The SEC’s June 13, 2018 legal analysis of #XRP.

The Perkins Coie Opinion Memo concluded #XRP was not a security. Although we do not know exactly what the #XRP Memo says, we know what it doesn’t say. Judge Netburn ruled the SEC’s analysis of w/r #XRP is a security is privileged so the public and @Ripple do not get to read it.

But we don’t need to know what it says b/c what it doesn’t say says:

EVERYTHING.

Judge Netburn stated that the memo DOES NOT make a recommendation.

What that means is that the SEC enforcement lawyers conducted an in-depth analysis of w/r #XRP was a security, but didn’t recommend an enforcement action.

It is obvious that in June 2018, SEC enforcement lawyers did not definitively conclude that #XRP was a security.

If it was clear and obvious that Ripple violated securities laws, there’s no doubt there would’ve been a recommendation to enforce those securities laws. There wasn’t.

It doesn’t matter what the memo says. If it found #XRP met 3 out of 4 Howey factors, so what! You need all 4.

As Dr. Layton stated over a year ago, how could @chrislarsensf be reckless in not knowing #XRP was a security in 2013 when SEC enforcement lawyers couldn’t make the case in 2018?

The fact that Larsen and @bgarlinghouse have an opinion, from the same law firm that helped Hinman write his speech, and it concludes #XRP is not a security - 6 years BEFORE that speech - demonstrates the SEC can’t prove Brad and Chris actually believed #XRP was or is a security.

The fact that SEC enforcement lawyers couldn’t conclude #XRP was a security in 2018 destroys the SEC’s ability to prove Larsen and Garlinghouse were reckless. To prove recklessness it must show it was obvious to anyone under those circumstances that #XRP was a security.

If it wasn’t obvious to the experts themselves (the SEC) then it can’t be so obvious to be reckless.

My next 🧵 will prove how the case against Garlinghouse and Larsen was dead upon filing. I might also discuss why Brad & Chris might owe a thank you to Jay Clayton.

When the motive isn’t legit, you get sloppy. 👇

https://twitter.com/JohnEDeaton1/status/1496536897715425283