The SEC v. Ripple has heated up in the last few days with the unsealing of Ripple’s 2012 legal memos with advice on how to avoid making XRP a security in the eyes of the Securities and Exchange Commission, but the lawsuit is expected to go full steam in the days ahead.
Judge Sarah Netburn will soon be presented with “the biggest decision in the Ripple”, according to the opinion of XRP Holders’ attorney John Deaton.
As it is known, the Magistrate has recently ruled on the deliberative process privilege (DPP) issue with a few wins for Ripple, which were enough to be considered as a great result for the defendants and XRP holders, as Bill Hinman’s speech was found not to be privileged, as well as related notes and drafts.
The SEC then filed a motion for reconsideration as the plaintiff, arguing that what was once said to be a “personal opinion” is now being called “public guidance.”
The 180º turn by the SEC has shocked many following the lawsuit, but Magistrate Netburn will literally be the judge of that.
John Deaton, the attorney representing the more than 65,000 XRP Holders with Amicus Curiae status in the SEC v. Ripple case, has commented on the upcoming ruling, pointing to how critical it will be for the outcome of the lawsuit.
It’s all about XRP vs ETH
“Judge Netburn’s decision on the motion for reconsideration will be the biggest decision in the Ripple case. I say that [because] I don’t believe the motion to strike the [Fair Notice Defense) is a significant one [because] the Judge isn’t deciding [whether] Ripple had fair notice, but only [whether] it can argue it”, he said.
“The reconsideration motion relates to the 63 emails containing drafts and comments regarding the Hinman #ETH is no longer a security speech. The final version of the speech discusses both #Bitcoin and #ETH. The final version does not refer or mention #XRP”
“#XRP consistently battled #ETH for the number 2 Crypto behind #BTC in January 2018 – 6 months before the Hinman speech – #XRP hit an all-time high above $3 making it the world’s 2nd largest crypto.”
“What are the chances of #XRP not being raised at all in any of the 63 emails? What are the chances that at least one person in the email chain brought up #XRP? One person in the email chain could’ve posed a very reasonable question , such as: “What about #XRP?”
“Once someone understands how #ETH was created and utilized and how #XRP was created and utilized, it becomes very logical to ask. For example, Attorney Wendy Moore – a partner at Perkins Coie – a law firm very knowledgeable of both #ETH and #XRP – asked that very question”.
“To be blunt, once you understand both #ETH and #XRP, it’s impossible NOT to ask that question. Joseph Grundfest, who helped the #ETH founders, explained this to the SEC in his December 17, 2020 letter. The Perkins Coie lawyers, who advised both platforms, raised the same question.
“It’s fair to assume that #XRP was brought up in one of those emails. We know that on June 13, 2018, a memo analyzing w/r #XRP was a security had been completed and DID NOT recommend enforcement. If true, the mere fact that #XRP was mentioned in the email is exculpatory.
“If Judge Netburn ultimately rules that the emails must be turned over, it is HUGE. Don’t forget, even if the SEC persuades her that the emails are covered under the DPP, she can still pierce the privilege and order the documents produced.
“If she rules the emails privileged, but orders the SEC to produce them, it means #XRP is referred to and/or the evidence is indeed exculpatory. If the judge believes evidence is exculpatory and Ripple has no other means of obtaining the evidence, she will pierce the privilege.
If she overturns her previous ruling and decides the emails are privileged but doesn’t pierce the privilege, the emails, although helpful to Ripple, are likely not as big as we perceive.
The reconsideration will be the biggest decision in this case short of dispositive motions.
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