SEC Memo Revealed: Was Ripple Aware of Investigation in 2018?

In a recent tweet, legal analyst John E. Deaton delves into the ongoing Ripple vs. SEC case, shedding light on significant developments that have caught the attention of the cryptocurrency community. Among these revelations, Deaton highlights a memo or statement by SEC lead prosecutors, indicating that Ripple’s CEO, Brad Garlinghouse, and the company were aware of the SEC’s investigation by June 14, 2018.

This revelation holds particular significance as it questions Ripple’s reliance on a speech made by former SEC official William Hinman.

Questioning the SEC’s Take

The details of the memo remain concealed due to privilege, but this secrecy has stirred up controversy. Reportedly, the memo does not propose any actions against Ripple’s sale of XRP tokens. This raises eyebrows and challenges the narrative Ripple has been putting forward.

Deaton points out that the memo likely indicates that SEC lawyers did not consider XRP as a security by June 13, 2018. However, if this memo carries weight now, it might implicate Ripple’s top brass in violating securities laws. Interestingly, an independent auditor was given the nod by the government in 2015 to closely scrutinize XRP sales every six months and produce comprehensive reports.

Ripple Under the Radar

As of June 2018, authorities had gathered a wealth of three years’ worth of XRP sales data. Ripple’s presentations to regulatory bodies like CFTC, SEC, and FinCEN, alongside their public image of XRP as a decentralized payment system, now face scrutiny. Could Deaton be hinting at the SEC’s growing unease with Ripple’s stance?

Deaton also brings in John Reed Stark, a figure known for his skeptical views on cryptocurrencies and his likely belief that Ripple has flouted laws. However, Stark acknowledges the need for an investigation, adding an intriguing perspective. The intricate nature of the case leaves those who value the SEC and fairness feeling uneasy.

Bill Morgan Lashes Out

Legal expert Bill Morgan joins the discourse with pointed criticism aimed at the SEC’s perspective on digital asset value, particularly XRP. Morgan argues that the SEC aims to simplify the matter by asserting that digital assets lack concrete value. This approach, he argues, makes it easier to apply the Howey Test to determine their investment status. However, Morgan contends that the SEC overlooks the inherent value digital assets can possess based on their functionality and utility.

The Ripple vs. SEC battle continues to evolve, evident from the agency’s recent request for an appeal and the availability of trial dates in 2024. This indicates that the legal tussle retains its complexity.

XRP and South Korea

Amidst the regulatory challenges, a positive trend emerges—XRP is gaining substantial traction among South Korean investors in their twenties. Recent data showcases that XRP constitutes a staggering 20.7% of their investment portfolios, surpassing the combined presence of Bitcoin and Ethereum at 17.5%. This surge propels XRP to the position of the second-largest coin in the country, underscoring its appeal among young investors.

Also Read: It’s Time for Higher Courts to Weigh In: Ripple, Terra, and SEC Case Gets Trickier