Thread by @JohnEDeaton1

During this 🧵, I share the interview I did w/@Jay_SpendDBits well over a year ago when I was researching the #XRPLedger and independent developers who have no connection to @Ripple or its executives.

@Spend_The_Bits is a PERFECT example of what’s wrong w/the SEC lawsuit.

https://twitter.com/michael63140627/status/1619282979221803013

In fact, there have been 15 Amicus Briefs filed in the @Ripple case and if Judge Torres were to inform me that she was only going to read one Amicus Brief but was going to allow me to pick the one she reads, I would tell her to carefully read the @Spend_The_Bits Amicus Brief.

The @Spend_The_Bits Brief may be the best at demonstrating how flawed the SEC’s all-encompassing #XRP theory is.

Like most in Crypto, Jay read the #Bitcoin White Paper and bought #BTC
He knew #Bitcoin was going to be part of the future and decided to develop a payments app.

@Jay_SpendDBits saw that #Bitcoin was too slow, however. Even the newly designated Congressman assigned to lead the Congress in providing digital asset regulatory clarity - @RepFrenchHill - recently stated that no one can’t wait 10 minutes or longer to pay for their coffee. 👇

https://twitter.com/bitcoinmagazine/status/1618619194270154754

Since 2019, @Jay_SpendDBits has been working to solve the “#Bitcoin Dilemma.”

Jay looked at the ⚡️ Network and decided it was too flawed b/c it didn’t eliminate the pre-funding of accounts and it required both parties to be online simultaneously and safety was an issue.

Jay had acquired a small amount of #XRP and noticed that it settled within 3-5 seconds. Even as a software engineer, when Jay first acquired #XRP he had NEVER HEARD of a company called @Ripple. When he first acquired #XRP Jay had NO CLUE who @bgarlinghouse or @chrislarsensf were.

Because the #XRPLedger is open source software, Jay decided he would build his payment app utilizing the #XRPL as a layer 2 solution to the #Bitcoin Dilemma.

Since Jay didn’t even know about Ripple, he didn’t ask Ripple or @JoelKatz for permission to build his #XRPL based app.

Jay received NOTHING from Ripple. No money. No advice. No technical assistance.

NOTHING!

AFTER he built his app, the only connection to Ripple is that Jay recently (last year) won the CBDC interoperability contest that was sponsored by Ripple beating out 500 contestants.

A year before winning 🏆 the CBDC contest, Jay demonstrated his @Spend_The_Bits app to me on @CryptoLawUS TV.👇

Last year he laughed when I asked about Ripple and he said “John I’m pretty sure they don’t know who I am or that SpendTheBits even exists.”

Clearly, between the amicus brief and the CBDC interoperability contest, @Ripple’s knows about him now.

In the @Spend_The_Bits Amicus Brief, Jay explains how #STB actually serves as a smaller alternative to Ripple’s ODL product/service.

In other words, if #STB were to scale and become wildly successful, it would be a competitor to Ripple.

Isn’t that the beauty of an open source software technology existing in a free market?

Yet, according to the SEC, Jay and #STB must’ve relied on Ripple - an absurd position.

It’s absurd b/c Jay relied on his talent, work-ethic, and his efforts and skill to develop #STB. The #XRP that Jay and #STB utilize - as the native currency of the #XRPLedger - to spend #BTC could NEVER be credibly considered an investment contract with Ripple aka a security.

Jay and #STB are certainly NOT in a common enterprise with the same company that Jay hopes to take low end market share from. Jay is also not in a common enterprise with every other #XRPHolder in the World as the SEC asserts in its Complaint and Summary Judgment motion.

@Spend_The_Bits allows you to spend your #BTC

Think of it this way:

The SEC agrees that the #BTC that is being spent on #STB’s app is NOT a security but claims that the .00005 #XRP (a fraction of one penny) that’s burned to make the transaction in the #XRPL is a security.

The SEC’s absurd theory is that each and every sale of #XRP, from anywhere in the
world, offered by anyone is, always has been, and always will be, the offer and sale, of a security.

In the SEC’s motion for summary judgment, it writes “a purchase of XRP WAS an investment of money into
a common enterprise with other XRP investors and with [@Ripple].”

Thus, every PAST sale of XRP is covered and the sales were securities.

The SEC’s motion isn’t limited to past sales of XRP or limited to only Ripple’s sales of XRP. The motion argues:

“A purchase of XRP IS an investment in a common enterprise with other XRP holders and with Ripple.”

Thus, the SEC claims present sales of XRP are also securities.

The SEC even asserts secondary sales independent of Ripple are securities. This means no matter who sales XRP regardless of Ripple. Let’s quote the SEC:

"The XRP traded, even in the secondary
market……TODAY represents that investment contract."

The SEC doesn’t even stop there!

The SEC’s allegations regarding #XRP’s status even travels into the future.

READ THIS:

“Even if some country were to recognize XRP as
fiat currency at some point in the future,

that would result from Ripple’s significant
entrepreneurial and managerial efforts to date (and likely in the future), on which public
investors expecting profit relied when making an investment of money into Defendants'
common enterprise."

Thus, the SEC’s theory is so absurd that it claims that even if a sovereign nation like El Salvador 🇸🇻 decides to make #XRP legal tender like #Bitcoin , it doesn’t matter, #XRP will still be a security.

So if @Spend_The_Bits goes to El Salvador and uses #XRP, it’s a security.

Foreign regulators in Japan 🇯🇵 , Switzerland 🇨🇭, Singapore 🇸🇬, the United Kingdom 🇬🇧, and the UAE 🇦🇪, have all declared #XRP a non-security. If #STB goes to these countries, the SEC’s sweeping theory would still classify #XRP a security.

The SEC’s theory is mind boggling.

You can hate #Ripple, think #XRP is a shit coin, and truly believe Ripple marketed, offered and sold #XRP as a security, but also recognize that the @SECGov is out of line and has gone way too far - stretching the Howey case and its analysis beyond recognition.

We must educate the legislators to stop viewing the token itself as the security. Any asset or commodity can be marketed, packaged, offered and sold as a security. Beavers 🦫, condos, orange 🍊 groves, and even #Bitcoin , have all been offered and sold as a security.

Those sales didn’t turn the 🦫 or the 🍊 into a security. Even if Ripple sold #XRP as a security, those sales didn’t turn #XRP itself into one.

Under no circumstance is the .00005XRP that @Spend_The_Bits uses to move or spend #BTC a security.

The SEC’s theory is outrageous.