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John E Deaton Profile picture
@JohnEDeaton1
May 21 • 3 tweets • 2 min read Twitter logo Read on Twitter
There are several reasons the SEC is in this position:

1. The lawsuit was NOT only about enforcing U.S. Securities laws. If it was, the case would have been limited to specific sales made by Ripple and it would’ve settled by now. The lawsuit was used as a weapon with bad motive.
Even Joe Grundfest, one of the most respected former SEC Commissioners alive today, called into question the motive behind filing this case.

2. @Ripple assembled one of the best legal teams money can buy: a former Chair of the SEC, a former Director of Corporation Finance,
a former Director of Enforcement, a former Chief of Litigation, a former Chief of the Criminal Division, & the best appellate law firm in the Country (Justice Gorsuch was there). $200M was spent for a reason.

3. The SEC never expected the #XRPArmy and 75K people coming together.

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More from @JohnEDeaton1

John E Deaton Profile picture
May 21
Read this short 🧵 please. When you look at all the other SEC-LIT-EMAILS cited in Ripple’s opposition, they are redacted. The one about there being reasonable grounds to not believe XRP satisfies all the Howey factors is not redacted. Image
The SEC wanted all statements by SEC staff redacted and it appears they all were. What this tells me is that the statement about XRP not satisfying Howey is NOT a direct quote from a senior SEC official - otherwise it would be reacted.
I’ve concluded that that statement was made by a market participant independent of Ripple not the SEC but it was referenced by someone in the Hinman emails, or the 3rd party email was forwarded to Hinman or the email group discussing the Speech.
Read 4 tweets
John E Deaton Profile picture
May 21
Since noticing this, I’ve been racking my 🧠 about two things: 1) why wouldn’t @Ripple lawyers make a much bigger deal about this (and not just include it in a footnote); and 2) how tf did I miss it before today (although to be fair I’ve read thousands of pages and do have a job)
I think I know how I missed it. Here’s the page before, now read the sentence ending with footnote 33. The sentence says “other market participants” independent from Ripple sent the SEC analyses of XRP, concluding XRP was not a security. That first citation is not the emails. ImageImage
Then the next citation immediately following, cites to “SEC-LIT-EMAILS” which are the Hinman emails. You can go further down and see them referenced again with the redactions. Therefore, this quote appears to be from the Hinman emails.
Read 4 tweets
John E Deaton Profile picture
May 20
Anyone familiar with Mandamus writs will not be surprised by the SEC’s response. The Coinbase Writ is asking for an Article III Judge to tell an Officer of the Executive Branch to do his job. Of course, the SEC will argue that it has total discretion to do the job as it sees fit.
The @coinbase Writ was very smart strategy. For one, SEC lawyers (and most federal prosecutors for that matter) are great at playing offense but suck when you fight back and put them on their heels. The SEC has to respond and when they do we have it in writing forever.
When I filed my Writ of Mandamus, I knew it was a long shot to say the least, and many jumped to predict how I was going to lose - like people are now with the Coinbase Writ. But the SEC’s response forced them to commit to certain things (e.g. their bullshit embodiment theory).
Read 6 tweets
John E Deaton Profile picture
May 19
I saw the 👇 video and then ran into this sign. Who is Canaan? A #BTC & #ETH mining ⛏️ company that went public. Who brought the IPO? Simpson Thacher - Bill Hinman’s law firm. What was Hinman’s position at the time his firm made these huge fees? Director of Corporation Finance. Image
Hinman must’ve took precautions to avoid any conflict, right? Wrong!

Look at the👇 emails. On the SAME DAY a letter goes out from Hinman’s Division, Hinman agrees to MEET his partner at Simpson Thacher. I’m sure that’s a coincidence. Some might be thinking: What’s the big deal? ImageImageImage
Then you should look at these👇 emails. BEFORE that meeting w/his partner who was bringing the Canaan IPO, Hinman was told that he would be in violation of the CRIMINAL financial conflict laws (18 USC 208) if he even emailed or called his law partners - LET ALONE meet with them. ImageImage
Read 24 tweets
John E Deaton Profile picture
May 19
A lot of comments about whether this delay is for settlement discussions. If the Hinman emails were going to lead to a settlement it would’ve been before they turned them over to Ripple. IMO, the SEC has accepted that the Hinman emails are eventually going to be made public.
@RoslynLayton intervened for the purposes of the public getting to read these documents. Judge Torres said her motion was moot b/c the documents must be made public. The 2nd Circuit will NEVER overturn that ruling. @dragonchain, @coinbase, etc will all seek these documents.
The SEC just filed a joint request for a one week extension based on the fact that there are so many documents that must be carefully redacted to satisfy her ruling. I seriously doubt the SEC would ✍️ that and then file an appeal or writ of mandamus. The documents are coming.
Read 4 tweets
John E Deaton Profile picture
May 18
Remember, we haven’t seen the the 56.1 statements and counter statements filed by the parties. The 56.1 statements and counter statements is where each party cites indisputable facts and evidence supporting their position for summary judgement.
Thus, it is very difficult for anyone, including me, to accurately weigh specific evidence submitted by the SEC and @Ripple. For example, every one knows that Ripple’s Blue Sky argument is that there must be an underlying contract before the Judge can even apply the Howey test.
However, in its summary judgment brief, Ripple admits that there were #XRP sales made by Ripple that did have a written contract as part of the sale. Ripple argues that b/c those contracts did not obligate Ripple to take post-sale actions for the benefit of the #XRPHolder,
Read 8 tweets

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