Crypto lawyer and XRP supporter John Deaton is outlining what he considers could be a big win for Ripple in its longstanding court battle with the U.S. Securities and Exchange Commission (SEC).
Deaton says that U.S. District Judge Analisa Torres may rule that only early XRP sales violated the Securities Act.
However, he says Ripple could then ask for a jury trial on whether the SEC failed to give it “fair notice” of a possible violation.
“If the judge finds Ripple violated Section 5 [of the Securities Act] because these specific sales constituted investment contracts, Ripple argues the jury must decide if Ripple had fair notice.”
He says that ever since the judge ruled to unseal the “Hinman” documents, there is speculation she may render a split decision.
The documents contain internal SEC communications related to a 2018 speech by former SEC official William Hinman when he stated in his official capacity that he believed both Bitcoin (BTC) and Ethereum (ETH) are not securities.
In 2020, the SEC sued Ripple, the issuer of XRP, accusing them of illegally selling unregistered securities.
“Since the judge’s decision regarding what can or cannot be sealed (e.g. the Hinman emails), many people are discussing a split decision: Ripple gets tagged for early XRP sales but ODL (on-demand liquidity) and secondary market sales are found to be non-securities (and XRP itself is not a security).”
Deaton says if the judge rules this way and lets a jury decide if Ripple had “fair notice,” the ruling should be seen as a big win for Ripple.
“If the above scenario happens AND the Judge agrees with Ripple that the jury must then decide whether those early sales should be excused because Ripple lacked fair notice that XRP sales were effectively illegal (unregistered), it can only be described as a TOTAL VICTORY for Ripple.”
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