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18K votes are in (huge thread by John Deaton)


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It was my opinion, that if the emails were extremely valuable to Ripple AND extremely damaging to the SEC, the SEC would settle BEFORE turning over the emails, drafts and comments. That didn’t happen. Instead, Ripple has now cited the Hinman emails in its opposition Briefs. Although the SEC asked the Judge to seal the documents, if the judge considers the Hinman speech emails in her decision in any regard, the emails and documents become “judicial documents” and the Judge will order the documents to be filed on the public docket w/a few redactions.

There’s a good chance, however, Judge Torres does not rely on the Hinman emails or drafts in her ruling and therefore, allows them sealed. Judge Torres has implied that the Hinman emails, drafts, and comments are relevant ONLY for purposes of cross examination/impeachment. Of course, she may have ruled that way BEFORE reading the emails herself. The emails are now part of the official record and have been cited to by Ripple. If we review the redactions in context, we can surmise a lot. Ripple’s Opposition Brief cites the emails on 4 pages.

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In the redaction 2 words appear redacted. When you read the entire paragraph in context though it’s safe to say one of the words is “confusion or speculation.” The Director of Trading & Markets Brett Redfern replied that the Hinman Speech would cause: “more speculation.”

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I surmised it was more confusion but Neil demonstrated it is more likely to say “more speculation.”

In the redactions there’s a second redacted word from Redfern’s email. It reads Redfern “deliberately recommended giving industry participants: “[?]”, presumably to give the agency more room to maneuver.” In context, it reads something like “opaqueness”/“vagueness”, etc.

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All the 4 pages above are included in Ripple’s Opposition Brief. In Ripple’s final brief - its Reply Brief - it only refers 1 time to the Hinman emails. Ripple’s Reply cites the emails b/c of the SEC’s attempt to have the court adopt strict vertical commonality.

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Although we can’t read what was actually written in the email, it is clear that it was a statement about the fact that owning a lot of an asset or token ALONE, is NOT enough to satisfy the common enterprise factor of Howey (although the SEC is arguing the opposite Ripple). Because Judge Torres previously ruled that the Hinman emails, drafts, etc may be only relevant for cross examination, and NOT relevant as to whether XRP was offered and/or sold as a security, I’m assuming Ripple lawyers only referenced what they believed would move the Judge.

Prior to reading the last two Ripple Briefs, I believed it was likely that XRP was referenced in the emails. Since ETH was getting a regulatory free pass, I believed it possible, if not likely, that someone in the Hinman speech email chain might’ve asked: “What about XRP?”

Some may disagree, but I now don’t believe XRP was referenced in the emails, comments or drafts. If #XRP itself was referenced in the emails, the Ripple lawyers would’ve certainly referenced it in the briefs (even though redacted, we should be able to pick it up in conThe SEC has argued (and I think the Judge agrees) that the motive behind why the lawsuit was filed is irrelevant as to whether #XRP was offered/sold as a security. Even if the emails show that Hinman and others acted improperly, it doesn’t change the Judge’s job in analyzing XRP.text). Although the emails and comments will likely show some underhanded by the SEC, I don’t believe they are as damaging as people (including me) once believed. If they were, I believe the case would’ve settled by now and the emails wouldn’t have been turned over to Ripple.

Yes, I am aware of the tweets from B Garlinghouse and s_alderoty stating the emails were worth the wait and expense and the SEC’s conduct was shocking. Even if the emails prove former SEC officials acted improperly, reckless, or w/bad motive, it doesn’t change the analysis.

"The SEC wants you to think that it cares about disclosure, transparency and clarity. Don’t believe them. When the truth eventually comes out, the shamefulness of their behavior here will shock you."

The SEC has argued (and I think the Judge agrees) that the motive behind why the lawsuit was filed is irrelevant as to whether XRP was offered/sold as a security. Even if the emails show that Hinman and others acted improperly, it doesn’t change the Judge’s job in analyzing XRP. It is clear that the SEC is coming after other tokens and projects. It has a case against Dragonchain, calling DRGNs (an ERC20 token) securities. The SEC filed the Wahi case claiming several ERC20 tokens are securities. ERC20 tokens are governed by the Ethereum Blockchain. Hinman said Ethereum was sufficiently decentralized. Look at the redacted fn

See how Hinman’s new test is referenced?

 

I GUARANTEE the Hinman emails will be sought in discovery by other litigants. They have an absolute right to this discovery as suggested by BlackberryXRP

Considering ERC20 tokens are governed by the Ethereum Blockchain, these litigants arguably have a greater right to get these emails in discovery than Ripple did. In other words, one could credibly argue that the Hinman emails and drafts are more relevant to ERC20 tokens than XRP. If Ripple can argue a lack of fair notice, these ERC20 tokens certainly can. Moreover, there’s already a ruling and analysis by Judge Netburn, and affirmed by Judge Torres, that these emails are not protected by the Deliberative Process Privilege or Attorney Client privilege.

In sum, I believe the SEC has accepted that the emails will eventually become public. In fact, in B Garlinghouse’s tweet he said when the truth is eventually known we will be shocked. It is my opinion now that the Ripple case will not settle because of the Hinman emails.

IMO, the only other reason for Gensler to settle is to avoid a ruling setting a bad precedent for the SEC as it goes against other tokens. But, tbh, I just don’t think he’s too worried about it. There’s been a push for the CFTC to oversee Crypto, so Gensler may roll the dice. I think the LBRYcom ruling emboldened him and the SEC. I also believe SBFraud SBF_FTX & FTX_Official have given Gensler more ammo to use in his war against crypto. As many of you know, 6 months ago I predicted he will sue an exchange in the very near future. And it’s coming.

In sum, unfortunately, I think a settlement w/Ripple is not in Gensler’s mindset. I don’t believe he’s going to settle and publicly agree that ongoing and future XRP sales, including in the secondary market, are non-securities. And Ripple won’t settle unless the SEC so agrees. Thus, I am in the 39% who answered the poll believing that we will get a decision by Judge Torres.

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Q. When these are redacted does Ripple get to see the full paragraphs

 

A. Ripple and the Judge have seen the documents unredacted.

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