Thread by @JohnEDeaton1

PREDICTION:

The case against @bgarlinghouse and @chrislarsensf is OVER. It was over the day it was filed. There’s NO WAY the SEC can meet it’s burden. The SEC must prove the two executives had actual knowledge #XRP was a security or was reckless in not knowing.

In order to prove recklessness the SEC must prove a reasonable person would’ve known #XRP was a security b/c it was so clear and obvious to anyone at that time.

LETS REVIEW SOME OF THE EVIDENCE:

1) October 2012 Perkins Coie Memo: It concluded #XRP was not a security;

2) Until April 2018, the SEC allowed staff, including enforcement lawyers, to trade and own Crypto - including #XRP - w/o any restrictions;

3) June 13, 2018 SEC Legal Memo analyzing w/r #XRP is a security: SEC enforcement lawyers DO NOT conclude #XRP is a security b/c there’s no enforcement recommendation made;

4) June 14, 2018 Hinman Speech: Hinman said #Ethereum is no longer a security
b/c it’s sufficiently decentralized. Since it can be argued the #XRPL is, at least, as decentralized (if not more), its reasonable to believe ongoing sales of #XRP from 2018 forward were lawful; ie👇

https://twitter.com/digitalassetbuy/status/1443162434156511232

5) August 20, 2018 meeting between @JoelKatz and @bgarlinghouse with Clayton and Hinman: Brad yells out:

“Ripple’s in purgatory because of the lack of clarity over #XRP.”

Neither Clayton nor Hinman inform Garlinghouse or Ripple that they or the SEC believe #XRP is a security;

6) Coinbase goes to the SEC in January 2019 and informs the SEC it has concluded #XRP IS NOT a security and plan listing #XRP the following month: the SEC said nothing to discourage Coinbase and #XRP was listed in February 2019;

7) On June 19, 2019, Rippled filed w/ the SEC and was allowed to buy 9% of @MoneyGram w/ the SEC knowing full well that Ripple would transfer or pay #XRP to MoneyGram, which, in turn, would sell #XRP in the secondary market to retail investors.

coindesk.com/business/2019/…

January 1, 2020 Bailard Inc., a financial investment firm, filed an ethics declaration with the SEC assuring the SEC that Bailard would only trade digital assets generally accepted in the financial industry as non-securities: #BTC, #ETH and #XRP.

IN SUMMARY:

The 2012 Perkins Coie Opinion Letter destroys the SEC’s chances of proving Garlinghouse and Larsen actually believed #XRP a security.

If SEC enforcement lawyers (the experts who determine what is or isn’t a security) couldn’t make the case #XRP was definitely a security as late as 2018 there’s no way it can prove Larsen and Garlinghouse were reckless in 2013 (or beyond).

In fact, Ripple can prove the opposite by showing that It wasn’t even obvious to the SEC that #XRP was a security by offering this evidence:

1) SEC’s own enforcement lawyers couldn’t make the case in 2018;

2) the Hinman speech provided reason to believe #XRP was in the clear;

3) Clayton & Hinman didn’t communicate #XRP was a security during meetings until 4 months before the lawsuit;

4) The SEC allowed it’s staff to own or trade #XRP w/o restriction up until 2019; and

5) It allowed MoneyGram to sell #XRP to retail holders (through (exchanges).

Thus, Garlinghouse and Larsen can prove they didn’t believe #XRP was a security. They can also prove the SEC itself wasn’t convinced #XRP was a security. The final nail in the SEC’s proverbial coffin ⚰️ (I mean case) is proving what most independent market participants believed.

You prove that by offering the Coinbase and Bailard evidence. Coinbase, with it’s sophisticated securities lawyers, concluded in 2019 that #XRP was not a security and communicated that fact to the SEC and then proceeded to list #XRP.

Bailard, a typical market participant, was very concerned about digital assets potentially being unregistered securities and therefore, made clear to the SEC it would only trade digital assets generally accepted w/in the industry as non-securities (#XRP).

The Defense rests.