John E Deaton Profile picture
Founder of https://t.co/I3MzMdM4eV; Bitcoin; ETH, XRP; Blockchain enthusiast; lawyer; entrepreneur
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Dec 7 19 tweets 11 min read
WERE RIPPLE EXECUTIVES RECKLESS - 🧵

In order for @chrislarsensf & @bgarlinghouse to lose the individual claims made against them, the judge has to conclude, as a matter of law, the two executives were reckless in not knowing #XRP was a security. Not negligent - but reckless! Said another way, the judge must find that no reasonable jury could ever conclude that the 2 executives were NOT reckless.

With that in mind, let’s consider some FACTS:

1) SEC enforcement lawyers were allowed to own and trade #XRP until March of 2019;
Dec 7 8 tweets 3 min read
Remember immediately after the @LBRYcom decision what I said. I said it was a total victory for the SEC and that SEC attorneys couldn’t have written a better decision for them. I also said the SEC and many other people would make a BIG deal about it. I also said that if Judge Torres followed the LBRY Judge’s reasoning, Ripple would outright lose. I said that reasoning would cause a lot of “Ripple will lose” comments. Its expected b/c holding a lot of #LBC was a big deal to the judge and Ripple holds 1/2 the #XRP.
Dec 6 22 tweets 13 min read
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. 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.
Dec 5 4 tweets 2 min read
I understand the point he’s trying to make 👇. He’s saying an appellate decision is a much bigger deal than a district judge’s decision. That’s why I said the @LBRYcom decision wasn’t as big of a deal as some people claimed. He’s looking at it from a legal precedent standpoint. But Judge Torres’ decision will have a HUGE impact practically and politically speaking. For ex, if the Judge agrees 💯 w/the SEC, @GaryGensler’s Regulation by Enforcement campaign will gain credibility and momentum. To Crypto outsiders, he won’t look like he’s out of line.
Nov 15 12 tweets 5 min read
Imagine if we could travel back in time to 2018:

The SEC could give a speech - not by Hinman b/c of conflicts - but by someone else (e.g. Valerie S., the Crypto Czar) - stating that the SEC, after much discussion (ie 63 emails and 58 drafts), made a significant determination. The SEC had determined that #BTC & #ETH were sufficiently decentralized b/c specific bench marks had been established and it specified what those bench marks were.

Imagine if the SEC in 2018 admitted that there existed regulatory uncertainty for the other projects and tokens.
Nov 13 6 tweets 2 min read
Every legitimate person supporting blockchain technology, decentralization, and digital assets desperately desires regulation. Had the U.S. implemented regulatory clarity w/specific guidelines in 2018 like it should have - innovation, job creation, tax revenue would have 🚀 Consumer protections could’ve been implemented. Proof of 1:1 reserves for any exchange or platform, the segregation of consumer funds and crypto from being commingled, disallowing the loaning out of consumer funds, protections disallowing bankruptcy from being used as a strategy.
Nov 12 13 tweets 7 min read
These are the people that will gaslight the public and legislators. SBF committed fraud and theft. We have regulations and laws that cover what he did. FTX was an OFFSHORE exchange. There is nothing @ewarren or @GaryGensler said or asked for that would have prevented FTX’s collapse b/c it collapsed due to FRAUD and THEFT.

The DCCPA being offered by @SenStabenow & @JohnBoozman wouldn’t have prevented the collapse and the bill WAS WRITTEN & promoted BY SBF.
Nov 12 5 tweets 3 min read
What some people fail to understand is that the point here isn’t that there is some grand conspiracy. The point is that @SBF_FTX bought “access to regulators” through 💰 and his family’s political connections.

Ask yourself something: why did SBF have such access? @FTX_Official was an offshore exchange. Why was SBF leading the policy debate? Why was he “testi-lying” before Congress. @coinbase is the largest exchange in the United States AND is a publicly traded company that has been attempting to work with the @SECGov.
Nov 11 4 tweets 3 min read
@kevinolearytv before you go demanding anything, I hope you realize that the legislation that @JohnBoozman and @SenStabenow offered up was co-written by @SBF_FTX himself. I hope you realize that that bill - The DCCPA - would NOT have prevented the collapse of @FTX_Official. I hope you realize that there are regulations on the books now in effect that govern what your boy SBF did. It’s called fraud and theft. You were the one who said you could not get burned at @FTX_Official and pushed the product as a PAID Spokesman.
Nov 10 6 tweets 2 min read
Here is the message:

“The SEC’s job is to protect investors, but Gary Gensler as chairman has failed to protect retail digital asset holders over and over. Now, evidence has emerged that proves that Gensler met with the mastermind of what may be one of the biggest frauds in American history, Sam Bankman-Fried, before the $14 billion collapse of FTX.
Nov 10 4 tweets 3 min read
Read this. Then read it again.

“that FTX might close a deal with the SEC setting harmful precedent for everyone else”

The @SECGov is a broken institution and people like @ewarren support @GaryGensler. Why would @SBF_FTX even believe that this was possible? Because it has been done over and over again. Regulatory capture is a real thing. I believe @cz_binance caught onto this nonsense and did what he did, although I doubt seriously he knew the house of cards that @FTX_Official represented.
Nov 9 7 tweets 4 min read
I agree w/ Jesse. If Judge Torres rules exactly the same as the @LBRYcom ruling, it would be game over in the U.S. until the 2nd Circuit overturned her (if it did) or, alternatively, the Supreme Court in 4-5 years. Like I said, the Ripple brief was written for the 2nd Circuit. If @CryptoLawUS’s livestream was longer yesterday I would have explained the real danger to @Ripple is that the SEC doesn’t have to prove the actual sale of an unregistered security. It only has to prove Ripple made an “offering” of an unregistered security.
Nov 8 6 tweets 2 min read
When Judge Netburn stated that the @SECGov “lacks a faithful allegiance to the law” she couldn’t have been more accurate. I was about to file a formal FOIA lawsuit in federal court because the SEC refuses to comply and provide Hinman’s calendar. They called my office yesterday. And said we will be providing it Today. But they gave me the same alleged calendar entries they provided to others.

THIS IS ALLEGEDLY HINMAN’s CALENDAR FOR JUNE 14, 2018 👇👇👇👇 Image
Nov 2 15 tweets 7 min read
WILL CONGRESS DO ITS JOB?@WarrenDavidson @PatrickMcHenry @RepTomEmmer @RepDarrenSoto @RepHuizenga

Is their an inquiry? I know that thousands of messages were sent asking for a letter of inquiry just asking if the Hinman Speech was officially screened and approved by SEC ethics. Congressman Davidson asked this question directly to @SECEnfDirector at the last hearing but he refused to answer claiming he couldn’t talk about it b/c it was being litigated. That answer is 💯 misleading and NOT true. The question must be answered now and can’t be avoided.
Sep 21 7 tweets 5 min read
EVEN IF YOU HATE RIPPLE READ THIS.

Miles is 💯
It is very bad for all crypto and must be fought. In the @Ripple case, the SEC is arguing if a foreign exchange maintains one sever w/in the U.S., it gives the SEC jurisdiction over crypto sales conducted anywhere in the 🌎 Think about the following true facts:

@bgarlinghouse is the CEO of Ripple, a company who’s business is 95% outside of the U.S. As part of his executive compensation, he is paid in #XRP. He sells some of that #XRP on an exchange legally licensed and operating in Japan 🇯🇵
Sep 20 8 tweets 5 min read
When @EleanorTerrett and I were discussing the @SECGov summary judgment, I didn’t bring up the one thing that stood out the most, b/c I had only read it once, right after reading @Ripple’s brief. I didn’t want to misspeak or be wrong. I’ve now read the @SECGov’s brief a 2nd time. What, without a doubt, is the most glaring thing missing from the SEC’s motion for summary judgment?

THE SEC DOES NOT RELY ON A SINGLE EXPERT!

There is NO SEC expert testimony attempting to prove price correlation between the efforts of Ripple and the price of #XRP.
Sep 19 4 tweets 3 min read
I didn’t expect the SEC to argue “#XRP itself is a security per se.” They’ve denied making that argument before yet argued the functional equivalent within the same paragraph. In the opposition to our intervention, they explicitly denied claiming #XRP is a security but still wrote:

“The #XRP traded, even in the secondary market, is the embodiment of those facts, circumstances, promises, and expectations, and TODAY represents that investment contract.”
Sep 19 5 tweets 4 min read
In the Complaint, the @SECGov claimed @Ripple was the common enterprise. Ripple forced it to concede that #XRPHolders have no legal or financial interest in Ripple and Ripple owes #XRPHolders NOTHING. B/c of that concession, the SEC’s expert then claimed the common enterprise is the “XRP Ecosystem.” This includes Ripple, all #XRPHolders in the world 🌎, exchanges, developers, users who only hold a minimum XRP to access the #XRPL, etc. Thus, the common enterprise is EVERYTHING.
Sep 11 25 tweets 11 min read
WILL THERE BE A SETTLEMENT IN @SECGov 🆚 @Ripple?

I’ve maintained for more than a year that settlement is 💯 dependent on whether the @SECGov must turn over the Hinman speech drafts, edits, emails and comments thereof. Other than having to produce the emails and drafts, another event that could facilitate a settlement is if the SEC receives a disfavorable decision in the @LBRYcom case.

I’ve become more convinced that there will be no settlement unless one or both of those things happen.
Sep 10 8 tweets 5 min read
A year ago I was hesitant and careful to not accuse Hinman of actually breaking the law. Like @CGasparino and @EleanorTerrett, I gave him the benefit of the doubt, plus you shouldn’t impugn someone’s reputation unless you have clear irrefutable proof he/she violated the law. 👇 But see yourself👇Hinman was warned by SEC Ethics that he was BARRED by the financial criminal conflict statute from engaging in ANY contact w/his partners at Simpson Thacher. What everyone needs to understand is that this was a STRICT ABSOLUTE PROHIBITION
crypto-law.us/wp-content/upl…
Sep 10 12 tweets 10 min read
When I filed the motion to intervene in @SECGov 🆚 @Ripple on behalf of #XRPHolders, I used @Spend_The_Bits as a great example of why the Judge 👩‍⚖️ must allow us to be heard in the case.

@Jay_SpendDBits WITHOUT any help or 💰 from Ripple developed a payment app utilizing #XRPL. #SpendTheBits will also be referenced in our Amicus Brief. According to Jay Kambo, @bgarlinghouse @chrislarsensf and @JoelKatz were completely unaware of who he was or of his idea to develop a payment app that allows you to spend your #Bitcoin JUST AS Satoshi Nakamoto envisioned.