John Deaton, founder of CryptoLaw and a blockchain advocate, believes that the SEC may not be successful in their case against Ripple CEO Brad Garlinghouse and co-founder Chris Larsen for allegedly not understanding that XRP was a security.
Deaton bases his prediction on the fact that Garlinghouse had three meetings with the SEC and the topic of XRP being a security was never brought up. Deaton stated:
“The fact that BG (Brad Garlinghouse) had three meetings with the SEC and they never once said ‘XRP is a security’ is evidence that a reasonable jury could conclude that he was not reckless.”
The SEC filed a lawsuit against Garlinghouse and Larsen in December 2020, claiming that they ignored facts that would have classified XRP as a security.
Deaton examined the facts in defense of the Ripple executives who have been accused of recklessness by the SEC. He presented several pieces of evidence through a series of tweets, including that in 2013, Ripple co-founder Chris Larsen discussed with the SEC, CFTC, and other agencies how XRP could revolutionize global financial systems. After this information was made public, both USGAO and FinCEN classified XRP as a “virtual currency” in 2014 and 2015 respectively, with the DOJ following shortly thereafter.