Last week, key stakeholders in the US Securities and Exchange Commission (SEC) v. Ripple legal battle communicated their prospective trial availability to Judge Analisa Torres, who is overseeing the case.
The representatives from the securities regulatory body and Ripple’s executive team are aligning their schedules for the anticipated trial, set to unfold during the second quarter of 2024. With specific dates earmarked for April and May, the stage is being set for a pivotal showdown between the two parties.
Meanwhile, on August 27, John E. Deaton, legal expert, and Ripple advocate, offered truly interesting insights into the case’s background, particularly the SEC’s former executive Bill Hinman and the infamous Howey Test – a legal assessment used in the US to determine whether a transaction qualifies as a security under federal securities law.
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Howey Memo did not suggest enforcement action against XRP
Notably, Deaton explained that on June 13, 2018, the SEC’s enforcement lawyers shared an XRP Howey Memo, applying the Howey Test to sales of XRP tokens.
The move occurred just a day before Hinman’s speech, an event that played a critical role in the lawsuit, in which the former SEC boss declared Bitcoin (BTC) and Ethereum (ETH) as non-securities.
But what is even more interesting is that the presented Howey Memo did not suggest any enforcement actions, Deaton stressed. Similarly, it neither recommended halting XRP sales nor sending a cease and desist letter to Ripple and its executives Brad Garlinghouse and Chris Larsen.
“Guess what the XRP Howey Memo did NOT recommend in June 2018? It didn’t recommend an enforcement action! It didn’t even recommend a stop selling XRP cease and desist letter be sent to @Ripple, @bgarlinghouse or @chrislarsensf.”
– Deaton said in a tweet.
XRP Howey did not conclude XRP is a security
Further in the post, Deaton continued that Garlinghouse and Ripple CTO David Schwartz met with former SEC chair Jay Clayton several months after the test was applied to XRP. During the discussions, Garlinghouse allegedly mentioned that “Ripple was living in purgatory’ and that XRP lacked regulatory clarity, in contrast to BTC and ETH.
Ripple CEO also asked them “what gives, [but] neither Clayton nor Hinman told them it was because XRP was a security,” Deaton said.
“We know very well that the XRP Howey concluded something other than XRP is a security. It kind of makes you wonder why they filed the case as they were leaving the SEC forever, doesn’t it?”
– the lawyer concluded.
In the meantime, XRP was changing hands at $0.51, down 2.6% in the past 24 hours. The cryptocurrency lost around 1% over the past week and more than 27% on the month.
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