John E Deaton Profile picture
Founder of https://t.co/I3MzMdM4eV; Bitcoin; ETH, XRP; Crypto enthusiast; lawyer; entrepreneur
JaQie Space Force Profile picture beezee🇦🇺🇳🇿 Profile picture Simon G Profile picture Jack Profile picture CaptainFomo Profile picture 7 added to My Authors
26 Nov
I have a question for @BrianBrooksUS. As OCC, you stated that there are too many agencies in finance and banking in the U.S. In an interview, you openly questioned: “Do we think it’s best for the Government to build a CBDC or utilize the private sector, which is already built?”
I believe, when you said that, you were referencing, at least in part, #XRP and the #XRPLedger. I say that b/c you stated the technology to build a CBDC was “already built”, but the only issue was with a lack of regulatory clarity. You definitely weren’t referencing #BTC or #ETH.
It wasn’t #BTC or #ETH b/c when you made this statement they enjoyed regulatory clarity by being declared non-securities by the SEC’s leadership plus those two digital assets weren’t associated with payments.
Read 5 tweets
21 Nov
Judge Netburn recognized the SEC’s over-broad and far-reaching theory that all XRP are securities when she recognized, according to the SEC’s own argument, that every person in the world selling #XRP is committing a Section 5 violation.

Read the SEC’s response back to her.👇 Image
The SEC attorney informed the Judge that her understanding wasn’t correct. It was this statement by the SEC attorney that helped fuel the relist #XRP campaign.

But read @bgarlinghouse’s attorney’s response regarding this same issue.👇 Image
“Contrary to what Mr. Tenreiro said, not just Ripple, not just Ripple’s affiliates, but any retail holder or any party IF THERE IS ANY INTENT TO DISTRIBUTE the security further. So it is not correct to say, that there is no potential liability throughout the XRP ecosystem.”
Read 6 tweets
20 Nov
COMMON SENSE EVIDENCE THE SEC LAWSUIT WAS USED AS A WEAPON

On the last day in power, you file a lawsuit against the #1 competitor of your law firm’s significant client;

You don’t limit the allegations to include only what you can actually prove (early & specific distributions);
Instead, you inflict the most damage possible against the competition by alleging all XRP are securities;

Even though you claim all XRP are securities w/o utility, you don’t seek an injunction like you have previously, b/c you know it will expedite the case and you will lose;
If all XRP are securities, as alleged, why has Ripple been allowed to continue to sell XRP - which includes selling XRP to pay legal fees to defend the lawsuit;

Why is the cofounder allowed to sell $2.6B worth of XRP since the lawsuit was filed (2x what the SEC seeks 🆚 Ripple);
Read 15 tweets
19 Nov
The @SECGov’s argument that all XRP, even XRP traded in the secondary market, are unregistered securities, is simply unconscionable. #XRPHolders’ brief will include statements and admissions made by the SEC itself supporting #XRPHolders’ position.
For example, take the infamous Hinman Speech itself. Read what’s said almost immediately:

“To start, we should frame the question differently and focus not on the digital asset itself, but on the circumstances surrounding the digital asset and the manner in which it is sold.”
To start, he says don’t focus on the Token itself. He goes further:

“Returning to the ICOs I am seeing, strictly speaking, the token – or coin or whatever the digital information packet is called – all by itself is not a security, just as the orange groves in Howey were not.”
Read 8 tweets
18 Nov
@CGasparino @EleanorTerrett
@LizClaman

We know for a fact that Hinman met with @ConsenSys’ lawyers & the co-founder of @ethereum and founder of @ConsenSys, @ethereumJoseph, on Dec. 13, 2017.

This meeting took place during the very height of the ICO prosecutions by the SEC.
We know for a fact that Ether held the world’s first ICO in 2014 - 3 years prior to the first Hinman meeting. We know that there were 3-4 more meetings before the Hinman Speech, including on June 8, 2018. We know Ether investors helped write ✍️ the speech (we have the videos).
We know on June 8, 2018, AFTER meeting the SEC, Joe Lubin PREDICTED that some projects were going to receive bad news from the SEC.

We know @Ripple was one of those “projects.” But a year before the SEC sued Ripple, it filed its most successful ICO enforcement action.
Read 18 tweets
17 Nov
The following email and open letter was sent to @GaryGensler:

Dear Chairman Gensler,

My name is John Deaton and I am an attorney who represents over sixty-thousand XRP Holders. Judge Torres granted us amicus curiae status in the SEC versus Ripple case.
The SEC, under your predecessor, didn’t limit its allegations to only include sales of XRP made by Ripple. Incredibly, the SEC lawyers are alleging the token itself is a security per se. This argument is akin to claiming the oranges were the securities in the Howey case.
With all due respect, it’s an absurd claim and its caused significant damage to retail holders of XRP - many whom utilize the token as a transfer/bridge asset - not as an investment. Over one-half of all XRP Holders purchased XRP for the first time unaware of the company Ripple.
Read 10 tweets
17 Nov
CONNECT TO CONGRESS

I think it’s time to Connect to Congress again. The crypto industry is floating many proposals for clarifying the federal rules, but U.S. digital asset holders have a more fundamental question for our lawmakers. Let’s put them on the spot. (1/5)
(2/5)
The SEC is practicing regulation by enforcement, setting policy with lawsuits and picking winners and losers rather than leveling the playing field. It’s unclear for investors and unfair to everyone.
(3/5)
To do this, the SEC is relying on a 1940s court case to set crypto policy. This is like using horse & buggy rules to regulate jet planes. It makes no sense, and it needs a solution.
Read 5 tweets
16 Nov
1/6

Despite @CGasparino being unbiased and giving Clayton the benefit of the doubt, Clayton has refused to speak to Gasparino and @EleanorTerrett regarding his decision to file the most significant enforcement action in recent history 🆚 @Ripple & #XRP - as he walked out the🚪 Image
2/6

Instead, Clayton chose to go on air with @andrewrsorkin @BeckyQuick and @JoeSquawk. Andrew offered up a 🥎 question and asked Clayton if he wanted to address the serious conflicts of interests and gross appearances of impropriety that have been alleged against him.
3/6

Clayton stated he would not comment on the Ripple case. Regarding the conflicts of interest related to his current employers, Clayton incredibly said:

“I did not know these companies while I was in the government. I was introduced to them after I exited.”
Read 6 tweets
16 Nov
MORE PROOF THAT THE SEC CASE 🆚 @Ripple IS DANGEROUS TO ALL CRYPTO: 👇 Image
The above language is not John Deaton’s interpretation of the SEC’s Complaint. The above is from Judge Torres herself. She acknowledges that the SEC claims Ripple created the secondary market for #XRP - including all sales - whether between individuals or sold on exchanges.
Judge Torres recognizes the SEC’s claim that b/c Ripple undertook efforts to create a secondary market for XRP, that, therefore, ALL #XRPHolders must have entered into a common enterprise with Ripple - regardless of whether they acquired #XRP directly from Ripple.
Read 5 tweets
14 Nov
THE LAW BEING IGNORED in @SECGov 🆚 @Ripple:

“The test is whether the scheme involves an investment of money in a common enterprise with profits to come solely from the efforts of others.”

- Supreme Court in SEC 🆚 W.J. Howey (1946).
The SEC repeatedly argues #XRP is a speculative investment. Yet, the very next line in Howey is:

“If that test be satisfied, it is immaterial whether the enter-prise is speculative or non-speculative or whether there is a sale of property with or without intrinsic value.”
Howey was decided in 1946 so one might argue there’s no precedent related to cryptocurrencies. NOT TRUE.

In 2019, the federal court in the SDNY handed down the #Telegram case.
Telegram was a pure ICO and money was raised PRIOR to the blockchain technology being developed.
Read 12 tweets
7 Nov
The @SECGov has sued @Ripple, @bgarlinghouse and @chrislarsensf for $1.3 Billion dollars alleging #XRP is an unregistered security.

The SEC claims that today’s #XRP including the #XRP traded in the secondary market are all investment contracts with Ripple. 👇👇👇
Does the SEC truly believe that all #XRP are securities - even the XRP sold by exchanges independent of Ripple?

If it truly believed all #XRP are securities, why didn’t the SEC order @JedMcCaleb to cease and desist from selling his billions of #XRP?
Why didn’t it seek a preliminary injunction to stop Ripple from selling any of its billions of escrowed #XRP?

If all #XRP are securities - as alleged by the SEC - why didn’t it attempt to stop anyone who was paid millions or billions in XRP from selling once the case was filed?
Read 10 tweets
6 Nov
I accidentally tweeted before I finished: but here’s a few more thoughts to consider:

What about the thousands of #XRPHolders who acquired XRP for non-investment purposes? What does the SEC say about that: 👇👇 Image
THE SEC CLAIMS THAT NO SIGNIFICANT NON-INVESTMENT USE EXISTS FOR #XRP.

What about the thousands of #XRPHolders who acquire the minimal amount of XRP to utilize the #XRPL and the DEX to purchase #CSC or other tokens? Or the thousands that utilize it as a bridge / transfer asset?
THE SEC MAKES THE ABSURD CLAIM THAT #XRPHOLDERS ENTERED INTO A COMMON ENTERPRISE NOT ONLY WITH RIPPLE BUT ALSO WITH ALL OTHER #XRPHOLDERS.

For those of you who think I’m making this 💩 up, read for yourself what the SEC alleges: 👇👇👇 Image
Read 5 tweets
6 Nov
THE SEC CLAIMS ALL #XRP ARE UNREGISTERED SECURITIES.

Here is proof from the Complaint itself, filed by the SEC👇
#XRPHOLDERS SUED THE SEC ASKING IT TO AMEND THE COMPLAINT AND ONLY ALLEGE #XRP IS A SECURITY WHEN @Ripple SELLS #XRP.

#XRPHolders argued that the SEC could not in good faith claim that the #XRP traded in the secondary market, completely independent of Ripple, were securities.
BUT THE SEC REFUSED.

Incredibly, the SEC argues ALL #XRP are investment contracts with Ripple.

“The XRP traded, even in the secondary market, is the embodiment of those facts, circumstances, promises and expectations, and today represent that investment contract.” 👇👇👇
Read 4 tweets
1 Nov
Remember when @ethereumJoseph tried to argue @Ripple and #XRP weren’t competitors to #Ether? That was a definite signal that #XRP was, in fact, viewed as a threat. In 2018, when Lubin made that assertion, #XRP was battling #Ether for the #2 spot behind #Bitcoin

Now read this👇
I don’t represent @Ripple. I do represent, however, 58K #XRPHolders and calling #XRP a “useless token” is both idiotic and untrue. Having that much animus against #XRP AFTER #Ether was given a regulatory free pass nonetheless proves #XRP was and still is perceived as a threat.
@CGasparino’s tweet below👇 is part of the #Ether free pass timeline. It was Andrew Keys who slipped up and told Gasparino that the Brooklyn Project’s efforts were approved by the SEC. One would assume a free pass would generate more grace and confidence in those who benefited.
Read 22 tweets
22 Oct
Go to crypto-law.us to find what you need related to the @Ripple / #XRP case. Read Howey for yourself.
The Howey Test:

“The test is whether the scheme involves an investment of money in a common enterprise with profits to come solely from the efforts of others.”
Notice the word “scheme” is used, NOT “asset”.

The very next sentence reads:

“If that test be satisfied, it is immaterial whether the enterprise is speculative or non-speculative or whether there is a sale of property with or without intrinsic value.”
Why does the SEC focus so much on the underlying asset? Anything can be “schemed”, packaged and marketed as an investment contact aka security.

The Orange Groves or the 🍊 weren’t the securities. The SEC also keeps arguing that the only utility for #XRP is speculation.
Read 4 tweets
21 Oct
William Hinman gave Ether a free pass regarding its ICO because he adopted the decentralization argument fed to him by prominent Ether investors.

That’s a fact, not an opinion. Nancy Wojtas was there and she speaks the truth. @CGasparino @EleanorTerrett @LizClaman @TeamCavuto👇
Hinman never explained exactly what about Ether’s “decentralized structure” caused sales of Ether to fall outside the U.S. securities laws. Its
3 1/2 years later and market participants and investors still don’t know how to define “sufficient decentralization.”
@Ripple fought hard to get any evidence related to the SEC’s analysis of Ether, #Bitcoin and XRP.

If Ripple can show the #XRPLedger is equal or more decentralized than the Ether Network, Ripple could win based on fair notice.

But what does “sufficiently decentralized” mean?
Read 25 tweets
11 Oct
#XRPHolders 🆚 @SECGov 🆚 @Ripple

THESE ARE THE FACTS AND THEY ARE NOT IN DISPUTE:

Mar. 23, 2017: Clayton agrees to recuse himself from voting on any matter related to his law firm’s (Sullivan & Cromwell) clients;

Nov. 30, 2017: Lubin & Consensys announce the Brooklyn Project
Dec. 13, 2017: Hinman has a meeting w/ Lubin & Consensys and lawyers from Sullivan & Cromwell (Clayton’s law firm);

Dec. 14, 2017:
Matt Corva of Consensys (along w/ lawyers from Sullivan & Cromwell) state that they are building an alliance with the SEC;
Jan. 25, 2018: Clayton meets with Andreesen & Horowitz and instructs them to put together a group and write up a memo. Perkins Coie, a member of the EEA, leads this group of Ether investors;

Mar. 12, 2018: @bgarlinghouse speaks publicly about Ripple using #XRP to replace SWIFT;
Read 25 tweets
10 Oct
Why would someone who dislikes @Ripple or @bgarlinghouse and doesn’t own #XRP want to join the fight against the SEC?

Read the Complaint filed by the SEC and ignore the noise it intentionally alleges in order to distract and divide. Thank God the judges are paying attention.👇
In the Order granting #XRPHolders amici, the Court takes notice of the absurd allegation that Ripple created the secondary market for XRP AND because exchanges sold the XRP that Ripple sold to them to the public we ALL entered into a common enterprise with Ripple AND each other🤦‍♂️
Skeptics will argue the Court misunderstands what the SEC is alleging. But the Court is 💯 on 🎯

Below are actual paragraphs from the Complaint. The over-broad far-reaching allegations could be applied to any crypto asset, including #Bitcoin
It’s both absurd and dangerous.⛔️
Read 4 tweets
11 Sep
WHO REVIEWED & HELPED WRITE THE HINMAN SPEECH?

Who was on the 63 emails that included a draft of the speech?

Where is Hinman’s public calendar?

Who purchased large quantities of #Ether between December 2017 to June 13, 2018?

$10k in #ETH ICO = a net worth more @GaryGensler👇
@ethereumJoseph received 9.5% of #ETH as a co-founder.

Everyone knows @VitalikButerin and Lubin held an ICO through crowdfunding which was without a doubt an unregistered securities offering.

Where was @SECGov?

Where is outrage from those that attack @Ripple & #XRP?
One River bet $1 billion on #BTC and #Ether in October 2020. Two months later on his last day at the @SECGov, Clayton directs the enforcement action against @Ripple and #XRP. Twelve weeks later, Clayton joins One River.

Clayton’s law firm represented Lubin and #Consensys.
Read 25 tweets
3 Sep
Consider the following:

Clayton and Hinman worked closely together before the @SECGov. Clayton brings Hinman on board to join him and the #SEC.

Joe Lubin @ethereumJoseph is co-founder of #Ether and founder of #Consensys.

Clayton’s law firm represented Lubin and #Consensys.
Hinman’s law firm was on the Board of the #EtherAlliance and represented clients involved with the #Ethereum Foundation.

Hinman met with Lubin and Consensys prior to his June 14, 2018 #BTC and #Ether are not securities speech.

Lubin was part of the Hinman speech conference.
In October 2020 One River makes a $1 billion bet on #BTC & #Ether.

2 months later on his last day at the SEC Clayton directed the filing of the enforcement action against @Ripple @bgarlinghouse & @chrislarsensf asserting the ridiculous claim that even Today’s #XRP is a security
Read 7 tweets
3 Sep
In the Hinman deposition it is mentioned that attorney Brian Rabbit was present at a meeting between Hinman & Clayton and @bgarlinghouse and @JoelKatz.

Attorney Rabbit was Senior Policy Advisor to Chairman Clayton at the time. Meet Brian Rabbit 👇
jonesday.com/en/lawyers/r/b…
Attorney Rabbit was at this meeting wherein Brad Garlinghouse informs Clayton that @Ripple was living in “purgatory” because of the lack of clarity regarding whether #XRP is or is not a security. Of course, Clayton never responded back to Garlinghouse that #XRP is a security.
The only thing more ridiculous than the @SECGov claiming today’s #XRP is a security is the @SECGov’s argument that the Hinman speech was only his personal opinion and not meant to be guidance by the #SEC.

@digitalassetbuy found Brian Jackson discussing the Hinman speech.
Read 4 tweets