Ripple Case: John Deaton Dismantles Former SEC Officials

XRP. (Photo; Doc. Teknobu)

JAKARTA - XRP, Ripple's cryptocurrency, has a positive price movement despite facing challenges and changes in sentiment in the market. In the US Securities and Exchange Commission (SEC) lawsuit against Ripple, the speech document disclosed by the former SEC executive, William Hinman, was in the public spotlight.

John Deaton's lawyer, who became Amicus Curiae in XRP's longstanding lawsuit, referred to the Safe Harbor Proposal. He noted Warren Davidson's statement, a representative from the United States, pointing out that the error should be addressed to former SEC executives Clayton and Hinman.

According to lawyers, representatives from Andreessen Horowitz (a16z) met with Hinman on March 28, 2018. It is important to note that Hinman had received a Proposal Safe Harbor memo before the meeting. At that time, only Ethereum (ETH) cryptocurrencies managed to fulfill the proposal. Even so, this rule should have been applicable to other tokens, except for XRP according to lawyers.

Deaton added that former SEC executive Hinman and Clayton realized that Safe Harbor has the potential to replace principle-based approaches. In fact, Safe Harbor's proposal was never adopted.

Safe Harbor will avoid legal action against companies like LBRY and Ripple by giving them notices of 5-10 factors showing adequate decentralization. The lawyer who supports XRP said companies that do not meet these criteria will be given 3-5 years to correct them so that their tokens can be considered commodities.

Hinman considers that significant ownership, more than 30-40 percent, would be considered good. However, there is still uncertainty regarding where the line should be drawn. Deaton added that the SEC could set a 3-5 year deadline for Ripple to reduce their holdings.