Thread by @JohnEDeaton1

Let’s place the below comment in proper context w/ something I like to call:

FACTS.

In August 2018 - 2 months after the Hinman speech and 2 months after SEC enforcement lawyers wrote a memo 📝 analyzing XRP under Howey, @bgarlinghouse and @JoelKatz met w/ Clayton & Hinman.

https://twitter.com/hoffmang/status/1599864709741965312

We know exactly what happened during this meeting because the SEC turned over the SEC’s notes 📝 from the meeting even though it didn’t have to because it was privileged work product. So the facts I recite are not self-serving statements by Ripple or it’s executives.

Two months earlier, Hinman declared #BTC & #ETH non-securities. At the time, #XRP was the #3 Crypto by market cap (it was #2 several times in 2018).

Ripple’s CEO frustratingly spoke out and said:

“@Ripple is living in purgatory because #XRP doesn’t have regulatory clarity.”

Two months earlier Clayton & Hinman were provided an #XRP Howey Memo 📝 .
SEC enforcement lawyers - experts on conducting a Howey analysis- had performed a detailed analysis on #XRP - applying the Howey test.
It’s dated June 13, 2018 - the day before the Hinman speech.

So this meeting between Clayton & Hinman w/ @bgarlinghouse & @JoelKatz was a PERFECT OPPORTUNITY to advise Ripple that #XRP was a security - assuming SEC enforcement lawyers had concluded as much.

Clayton & Hinman DID NOT advise the Ripple executives that #XRP was a security.

Garlinghouse commented that #BTC & #ETH were given clarity two months earlier in the speech, so he was there asking:

WHAT ABOUT #XRP?

Whether you hate or love #Ripple and whether you believe #XRP is or is not a security, surely we can all agree that that was a fair question.

Clearly, the June 13, 2018 XRP Howey Memo 📝 - WRITTEN BY SEC ENFORCEMENT LAWYERS - did NOT conclude that XRP was DEFINITELY & ABSOLUTELY a security w/ CERTAINTY the way @saylor claimed it is, on @patrickbetdavid’s podcast recently.

THE XRP HOWEY MEMO:

At the end of the #XRP Howey Memo, the enforcement lawyers DO NOT recommend the Commission take any action regarding #Ripple or #XRP.

If SEC lawyers had determined XRP to be an unregistered security in 2018, there would be a recommendation.

They would’ve recommended a cease and desist letter be sent to Ripple and its executives or an enforcement action be filed against Ripple.

They would not conclude #XRP is DEFINITELY a security and sit back letting Ripple and its executives sell illegal securities to the public.

Certainly, if the XRP Howey 📝 had concluded XRP is a security, Clayton & Hinman would’ve informed @bgarlinghouse & @JoelKatz that it was a security when Garlinghouse spoke out about purgatory.

They would’ve said “#XRP is a security and that’s why it wasn’t given clarity.”

If the 2018 #XRP Memo had concluded XRP was clearly a security, the SEC would’ve turned it over in discovery just like it did the August 2018 meeting notes. If the 📝 concluded XRP was a security the SEC would’ve handed it over and argued it gave Ripple plenty of time to fix it.

But it didn’t turn it over and kept it hid behind privilege.

MORE FACTS 👇

I think we can all agree that @brian_armstrong likely hired extremely qualified, sophisticated and experienced securities lawyers to work at @coinbase.

Six months after the XRP 📝 and 4 months after the meeting between Clayton & Hinman and the Ripple executives, Coinbase and its sophisticated securities lawyers met w/ Hinman and his FinHub crew SPECIFICALLY about #XRP in January 2019.

Coinbase’s lawyers informed Hinman and the SEC that they ran #XRP through Coinbase’s Framework for determining whether an asset meets the definition of a security.

I’m sure Coinbase’s lawyers reminded Hinman, Valerie S. Amy Starr, etc., that the SEC had publicly complimented Coinbase’s Framework for determining securities.

You see Coinbase took the SEC’s Framework except improved it by adding numerical weightings to the different factors.

Coinbase told the SEC that regardless of whether XRP was or wasn’t a security between 2013-2017, 2019’s XRP was NOT a security and Coinbase intended to list XRP almost immediately - UNLESS OF COURSE - the SEC disagreed.

Again, the XRP Memo 📝 was written 7 months prior.

The SEC did NOT disagree and Coinbase listed XRP on February 26, 2019. But Coinbase didn’t just list XRP, Coinbase promoted the shit out of #XRP’s UTILITY.

Coinbase advertised how customers could send 💰 Internationally for FREE using #XRP or #USDC. XRP helped expand Coinbase.

Coinbase intended to file for an IPO and go public so it didn’t want to run afoul of what the SEC believed.

Certainly, if it was crystal clear that #XRP was a security the way @saylor and @maxkeiser claim it is, the SEC wouldn’t let illegal securities flood the public markets.

MORE FACTS:

Almost a year after the XRP Howey 📝 was written, @MoneyGram filed SEC disclosure forms. MG informed the SEC in writing ✍️ that Ripple was going to transfer XRP to MG and MG was going to utilize that XRP in its cross border payments business.

The SEC was fully aware that MG was NOT going to Hodl XRP but instead, sell the XRP through a Coinbase or other exchange to U.S. holders. The SEC did nothing, but in January 2020, the SEC advised MG to document XRP sales as a contra expense and not as revenue.

MORE FACTS:

SEC enforcement lawyers and staff were allowed to own #XRP until 2019.

2 months before Clayton filed the lawsuit as he walked out the SEC’s🚪, along w/ Hinman, the Enforcement Director, Marc Berger, etc, the SEC advised U.S. investors XRP was treated like BTC & ETH

So, even if Hinman did inform @bgarlinghouse in late 2019 that it was likely that the SEC might determine XRP is a security at some undetermined point in the future, it is meaningless when you place it in the proper context and backdrop of those pesky things called:

FACTS!