Ripple’s XRP Deemed “Not a Security” by SEC Doc in Massive Case Lift

In a surprising twist, a buried footnote suggests XRP was discussed within the SEC, potentially impacting the lawsuit.

Angry John Deaton holding two documents.
Created by Gabor Kovacs from DailyCoin
  • An intriguing discovery has emerged in the ongoing legal dispute.
  • Pro-XRP lawyer John Deaton has brought attention to this overlooked revelation.
  • Statement suggests XRP may not have met Howey Analysis criteria.

An intriguing discovery has emerged in the ongoing legal dispute between Ripple and the United States Securities and Exchange Commission (SEC), highlighted by prominent pro-XRP lawyer John Deaton. 


Deaton took to Twitter on May 22 to draw attention to a seemingly insignificant footnote tucked away in a Ripple legal document. This revelation suggests that XRP, the digital asset at the center of the lawsuit, was a topic of discussion “between SEC staff prior to the Hinman speech.”

XRP Not a Security According to SEC’s Internal Deliberations

The significance of this finding cannot be understated, as internal deliberations within the SEC regarding the classification of XRP as a security could have far-reaching implications for the lawsuit. 

The SEC initially filed a lawsuit against Ripple in December 2020, alleging that the sale of XRP constituted an unregistered securities offering. Ripple has consistently denied this claim, contending that XRP fails to meet the criteria outlined in the Howey test, which is used to assess the classification of transactions as securities.

The notable footnote, believed by Deaton to originate from a third-party external to the SEC, states:

"There are reasonable grounds to conclude that XRP does not satisfy all elements of the Howey Analysis and is therefore not a 'security' for purposes of the federal securities laws."

Deaton 95% Confident

During a Twitter Spaces session hosted by Fox Business journalist Eleanor Terrett on May 22, Deaton highlighted that this explicit statement indicates that XRP was discussed within the SEC. 


He posited that either an SEC official cited an external source claiming XRP was not a security, or the email containing the statement was forwarded within an internal email chain.

Deaton expressed a 95% level of confidence that the statement was made by someone other than a senior SEC official, emphasizing the significance of this revelation in the ongoing litigation. 

On the Flipside

  • The footnote in the Ripple legal document is still subject to interpretation and may not necessarily indicate a decisive outcome in the ongoing legal dispute.
  • While the inclusion of the statement in the Ripple document suggests XRP’s discussion within the SEC, it does not definitively prove that the agency’s staff deemed XRP not to be a security.
  • Although supported by this finding, the viewpoint that XRP has been a subject of internal discussions within the SEC is still a matter of interpretation. It has yet to be officially confirmed by the regulatory body.

Why This Matters

The revelation that XRP was discussed within the SEC before the Hinman speech sheds light on internal deliberations and potentially challenges the SEC’s classification of XRP as a security. This finding can reshape the regulatory landscape and impact how cryptocurrencies are perceived and regulated.

To learn more about the impact of Ripple’s momentum and the significance of the Hinman documents, read here:

Ripple Builds Momentum: Hinman Docs, Metaco, & CBDC Platform

To stay updated on the recent surge in XRP value, with an 8% increase in just seven days and a market cap of $1.9 billion, read here:

XRP’s Value Surges 8% in Seven Days, Injecting $1.9B in Market Cap

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Kyle Calvert

Kyle Calvert is a cryptocurrency news reporter for DailyCoin, specializing in Ripple, stablecoins, as well as price and market analysis news. Before his current role, Kyle worked as a student researcher in the cryptocurrency industry, gaining an understanding of how digital currencies work, their potential uses, and their impact on the economy and society. He completed his Masters and Honors degrees in Blockchain Technology within Esports and Business and Event management within Esports at Staffordshire University.