The legal battle between Ripple and the US Securities and Exchange Commission (SEC) has taken a dramatic turn, as a pro-Ripple lawyer has revealed some shocking new facts that could undermine the SEC’s case.
The lawyer, John E. Deaton, is the founder of CryptoLaw and the lead counsel for over 20,000 XRP holders who have filed a motion to intervene in the lawsuit. Deaton claims that he has obtained documents from a Freedom of Information Act (FOIA) request that shows that the SEC had previously acknowledged that XRP was not a security.
According to Deaton, the documents show that in 2019, the SEC’s Division of Corporation Finance (DCF) granted a no-action letter to a company called Pocketful of Quarters (PoQ), which was issuing its own cryptocurrency called Quarters. The DCF stated that Quarters were not securities because they had a “consumptive use” and were not sold for speculative purposes.
Deaton argues that XRP has the same characteristics as Quarters and should not be considered securities either. He says that XRP has a consumptive use as a bridge currency for cross-border payments and that most XRP holders are not speculators but long-term investors who believe in Ripple’s vision.
Deaton also claims that the SEC had previously allowed Ripple to buy back XRP from the secondary market, which would be illegal if XRP were securities. He says that the SEC had never treated XRP as securities until it filed the lawsuit in December 2020.
Deaton says these new facts are “game-changers” and expose the SEC’s “inconsistent and arbitrary” enforcement actions. He says that he will present these facts to the court and ask for a summary judgment in favour of Ripple and XRP holders.
Deaton’s bombshell revelation has sparked a wave of excitement and optimism among the XRP community, who see it as a major win for their side. However, the SEC has not yet responded to Deaton’s claims, and the lawsuit is still ongoing. The outcome of this case could have significant implications for the future of XRP and the entire crypto industry.