Thread by @JohnEDeaton1

I defend secondary market sales of #XRP as well as other tokens sold in the secondary market (ie #LBC), not @Ripple or @LBRYcom.

When I sued the SEC, people immediately called me the #XRP Attorney even though I disclosed up front that I owned more in #BTC & #ETH than #XRP.

https://twitter.com/timr614/status/1632000667433697281

I was shocked that more people didn’t read the Complaint 🆚 Ripple the way I did - b/c it attacked the token itself and didn’t focus on the circumstances surrounding the way Ripple offered and sold #XRP.

Many allegations about #XRP applied to all other tokens.

For example:

“The nature of XRP itself made it the common thread among Ripple, its management, and all other XRP holders.”

The “nature of XRP itself”?

Wtf does that even mean?

The SEC is asserting that by simply owning a token you are in a common enterprise with ALL other token holders!

Here’s another example:

“The very nature of XRP in the market—as constructed and promoted by Ripple— compels reasonable XRP purchasers to view XRP as an investment.”

In the claim above, you could substitute #XRP and Ripple with #BTC and Satoshi Nakamoto and it equally applies.

But WTH is with:

“the very nature of XRP” nonsense?

What about users of the #XRPLedger who are utilizing #XRP to transfer money or other assets? What about developers on the #XRPL?

@TapJets accepts #XRP as payment to book a private jet. It doesn’t view #XRP as an investment.

@Spend_The_Bits uses the #XRPL to spend your #BTC

Here’s more:

“Investors who purchased XRP… invested into a common enterprise with other XRP purchasers, as well as with Ripple.”

AND

“Because XRP is fungible, the fortunes of XRP purchasers were and are tied to one another”

Because “XRP is fungible”?

Is that supposed to be a joke?

ALL #XRPHolders are in a common enterprise with not just Ripple but ALL other #XRPHolders in the world? This includes jurisdictions that have declared XRP a non-security like U.K., Japan, Singapore, Switzerland and UAE.

On Jan. 1, 2021, 9 days after the SEC filed the case 🆚 #XRPHolders (not only Ripple), I filed the Writ of Mandamus against the SEC. I asked for the SEC to follow 80 years of precedent and limit its allegations surrounding #XRP to be about specific transactions made by Ripple.

That’s not defending Ripple. It’s about fighting SEC overreach. We must fight the SEC and others who attempt to take an unconstitutional shortcut and focus on the token itself and not the circumstances surrounding how a specific promoter or company offers and sells a token.

What’s important to know is that in the 76 years since Howey was decided, there isn’t a single case that has found the underlying asset itself to be a security when talking about an investment contract scenario.

Moreover, there isn’t a single case in almost 80 years that has found a subsequent sale of an investment contract to also be the sale of a security.

Think about Howey: the sale of the orange grove was considered an investment contract b/c the investor was relying on Howey.

Now imagine that investor dies and leaves the orange grove to his heir. His heir then sells the orange grove to a second buyer. The second buyer doesn’t know anything about the Howey company. He just thinks it will be cool to own an orange grove b/c he loves oranges 🍊so much.

Imagine the second buyer of the orange grove intends to consume some of the delicious oranges for himself and also sell some of the 🍊 for a profit. The second buyer also intends to use the orange grove as collateral for a loan.

Imagine that the second buyer never heard of the Howey Company and was completely unaware of how the first buyer acquired the orange grove.

There is NO WAY the second purchase of the orange grove would be considered an investment contract under U.S. securities laws. FULL STOP 🛑

Digital assets are NO DIFFERENT in the Howey analysis than the orange grove analysis. The land (orange grove) itself is not a security. Just b/c the Howey Company originally sold it as an investment contact does not mean a secondary sale is also an investment contract.

@GaryGensler & @SECGov are engaging in what I call an unconstitutional shortcut. Like with #XRP, instead of focusing on the circumstances surrounding the sale of a token by a specific promoter (@Ripple), they are shortcutting the analysis and calling the token itself a security.

Had the SEC sued @ethereum @VitalikButerin @ethereumJoseph and called #ETH a security, including secondary market sales, instead of suing @Ripple @bgarlinghouse & @chrislarsensf alleging #XRP is, I would be called the #ETH attorney and represent tens of thousands of #ETHHolders.

Whether Ripple sold XRP as a security or whether ETH’s ICO violated securities laws does not mean the token is a security and it certainly doesn’t mean secondary sales thereafter are sales of securities.

We must educate our legislators and not allow this false narrative to grow