Evidence of internal emails from the U.S. Securities and Exchange Commission (SEC) has surfaced, suggesting that XRP, the controversial cryptocurrency associated with Ripple, may not meet the requirements of the Howey Test and may not be classified as a security.
The discovery of these emails was made by legal commentator John Deaton, who found references to them in Ripple’s opposition and reply briefs. Deaton expressed surprise at the lack of emphasis placed on these emails by Ripple’s legal team.
🚨NEW: A really interesting find by @JohnEDeaton1 in the footnotes of @Ripple’s Opposition and Reply Briefs.
It shows references to internal @SECGov emails conceding reasonable grounds that #XRP does not satisfy all elements of the Howey Test and is therefore “not a security.” https://t.co/R2zwWqjOrk
— Eleanor Terrett (@EleanorTerrett) May 21, 2023
The emails, known as Exhibit 220, appear to present arguments supporting the notion that XRP does not fulfill all the factors of the Howey Test, which is used to determine whether certain transactions qualify as investment contracts.
Interestingly, Deaton initially overlooked this important detail in the footnotes, despite having thoroughly reviewed thousands of pages of legal documents related to the case. The placement of the email citation, which followed a sentence discussing analyses submitted to the SEC by independent market participants, may have diverted attention away from its significance.
Deaton also questioned why Ripple’s lawyers did not highlight this information more prominently, considering its potential impact. He speculated that the quote might not be a direct statement from a senior SEC official but rather a reference to another person’s analysis of XRP in the emails involving Hinman, a former SEC official.
This new revelation raises intriguing questions about the classification of XRP and its legal implications. If XRP is ultimately determined not to be a security, it could have significant ramifications for Ripple and the wider cryptocurrency industry. As the case unfolds, the impact of these internal SEC emails and their interpretation will undoubtedly be closely scrutinized by market participants and legal experts alike.
Read more:
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- US Court Denies SEC’s Motion To Seal Hinman Speech Documents; Ripple Community Celebrates As XRP Price Soars 4.3%
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