Thread by @JohnEDeaton1

A 🧵 about a few Facts and Dates proving the lawsuit 🆚 @Ripple & #XRP was a weapon:

1) In 2103 @chrislarsensf gives a presentation to regulators including the @SECGov,
@federalreserve, #FinCEN, etc, discussing his plan to utilize the #XRPL and how he intends to distribute #XRP;

https://twitter.com/martincpvalk/status/1540742520061042688

2) Two years after that meeting, in 2015, FinCEN & DOJ enter into a settlement w/ Ripple declaring #XRP a “convertible virtual currency” and force Ripple to register #XRP sales w/ FinCEN - NOT the SEC - (the SEC is made aware of the deal and its terms pursuant to info sharing);

3) On June 13, 2018 SEC Enforcement Lawyers write ✍️ a legal memo 📝 analyzing #XRP under Howey and these enforcement lawyers DO NOT conclude #XRP is a security and it SO NOT recommend an enforcement action or a cease and desist letter against Ripple;

4) On June 14, 2018 Hinman gives his speech on decentralized networks and says present day sales of #ETH are not securities thus suggesting, any network that is as decentralized or more decentralized than #Ether, the SEC will NOT consider the token a security;

5) In August 2018 @JoelKatz and @bgarlinghouse meet w/ Hinman and Clayton seeking regulatory clarity regarding #XRP and Garlinghouse complained that Ripple was living in purgatory over a lack of clarity. Neither Clayton nor Hinman respond or inform him that #XRP is a security;

6) In September 2018 Garlinghouse meets w/ SEC Commissioner Elad Roisman over the lack of clarity and Elad says “I apologize you’re even here” or words to that effect and Garlinghouse leaves the meeting feeling more positive about the SEC’s view over #XRP’s regulatory status;

7) In January 2019 @coinbase w/ its very experienced sophisticated securities lawyers meet w/ Hinman and the SEC and inform the SEC that Coinbase has run #XRP through its security framework and concluded today’s #XRP is not a security and plan to list #XRP immediately;

This #XRP meeting w/ the SEC was very important to Coinbase b/c it intended to file for an IPO and go public and obviously couldn’t do so while selling an unregistered security;

8) Hinman and the SEC did not dispute Coinbase’s conclusion that today’s #XRP is NOT a security and Coinbase listed #XRP in February 2019 and was allowed to go public with its IPO while listing #XRP;

9) On June 17, 2019 Ripple filed a NOTICE w/ the SEC stating:

“This agreement will enable @MoneyGram to utilize Ripple’s xRapid product (#XRP) in foreign exchange settlement as part of the MoneyGram’s cross-border payment process.”

See 👇

sec.gov/Archives/edgar…

That’s right:

Ripple gave the SEC written notice that Ripple was planning to distribute the same token (#XRP) that the SEC enforcement lawyers analyzed ONE YEAR PRIOR to the MoneyGram deal. The SEC did nothing, just like they did nothing to counter Coinbase’s listing of #XRP;

10) On January 1, 2020, Bailard Inc, filed an Ethics Disclosure w/ the SEC making assurances and guarantees to the SEC that the only cryptocurrencies Bailard or its affiliates would trade or hold would be the ones the SEC and the market consider non-securities: #BTC, #ETH & #XRP;

11) The first time the SEC informed Ripple it believed #XRP was a security was a few months before filing the lawsuit in December 2020 (after multiple meetings in years prior, including 2 months after the #XRP memo was written);

12) On December 17, 2020, Joseph Grundfest wrote to Clayton @HesterPeirce @SECHerrenLee and the other commissioners and all senior SEC officials pleading w/ them to not bring a suit alleging #XRP is a security b/c innocent holders would be financially devastated and harmed.

Grundfest who served as a liaison between the SEC and @ethereumJoseph @VitalikButerin @stevennerayoff made clear that there was no material distinction between #ETH and #XRP and by suing #XRP it called into question the SEC’s true motive behind filing the lawsuit.

Grundfest said the mass exodus of SEC leadership who pushed the lawsuit but was immediately leaving raised “obvious concerns” and he said if you file the case, the exchanges will be compelled to delist #XRP, despite trading it for almost 8 years;

See👇
crypto-law.us/wp-content/upl…

13) On Dec. 22, 2020, Clayton’s last full day at the SEC, the SEC files a lawsuit against Ripple. And even though there isn’t one single count of Fraud, the SEC takes the unusual step of suing the individual executives.

But the SEC doesn’t limit it’s allegations to only include sales offered by Ripple or it’s executives - the SEC claims every sale of #XRP from 2013 until today made BY ANYONE, including exchanges and retail holders are all sales of unregistered securities. 👇

Astonishingly, the SEC now claims that the #XRP Ripple transferred to MoneyGram after telling the SEC about it, were also illegal. Moreover, when MoneyGram turned around and sold that #XRP to retail holders, it too was illegal.

Everything Grundfest warned came true;

14) We learn that Clayton told @a16z’s Chris Dixon to assemble a working group and write ✍️ up a proposal. Dixon looks to Lowell Ness from Perkins Coie (PC) - who has worked for #a16z from the beginning. PC is a member of the #EEA. These #a16z lawyers write up a Safe Harbor.

https://twitter.com/johnedeaton1/status/1475477209267773444

Since PC is a member of the #EEA which ONLY promotes #ETH, it isn’t a surprise #ETH is the only token mentioned in the Safe Harbor. These Lawyers meet w/ Hinman.

15) Hinman didn’t receive a retirement pension from Simpson Thacher (STB)- he was an ongoing profit sharing partner.

Hinman collected $15M while at the SEC from his law firm - a member of the EEA. Hinman was told by the SEC Ethics Office he was under a criminal conflict bar from having ANY contact with STB - he violated it 3 more times after being told. Hinman returns to STB (he never left);👇

After agreeing to give #ETH a free pass to the investors at a16z - Hinman becomes a partner w/ - WAIT FOR IT - the investors at a16z;

Clayton’s former law partners from Sullivan&Cromwell (SC) went to work at @ConsenSys. SC represented Consensys and brokered the JPM Quorum deal

16) JPM Coin was direct competition w/Ripple & #XRP. The deal w/ Consensys was Aug. 2020 (4 months before lawsuit).

17) Clayton voted to bring an action 🆚 his law firm’s client’s biggest competitor and voted 🆚 fellow Republican commissioners (per @CGasparino @EleanorTerrett);

18) One River bet $1B on #Bitcoin and #ETH in October 2020 - 2 months before the lawsuit. Clayton goes to One River w/in weeks of leaving SEC.

18) Marc Berger, the Enforcement Director, who helped write the absurd over-broad complaint, goes to STB w/ Hinman.

Timeline facts👇

https://twitter.com/johnedeaton1/status/1447400529534066692

The SEC seeks $1.3B from Ripple and the two executives. But Ripple co-founder @JedMcCaleb has sold over $2B worth of #XRP SINCE THE LAWSUIT WAS FILED. Also, Ripple continues to sell #XRP.

In fact, when Ripple objected to costly discovery (costing several hundred thousand dollars) the SEC told the judge Ripple should sell #XRP to fund it. The SEC literally recommended and encouraged Ripple to sell #XRP while claiming those sales are illegal.