Attorney Jeremy Hogan, who is closely followed by the XRP community, discussed yesterday’s pre-trial conference between Ripple and the US Securities and Exchange Commission (SEC) in a new video.
As Hogan pointed out, there were “some interesting things and a surprise” to learn.
“The judge was pretty honest. So we haven’t learned much about him from this hearing. But have we learned a lot about the parties’ positions and how to approach the case, and a great new piece of information? ”
Because it was the first meeting with the judge, both the SEC and Ripple had to present their real and legal basis for the claims and defenses in just a few minutes, so both sides presented their best arguments. First, the judge asked the SEC’s opinion to maintain a neutral stance, as Hogan stated, and used the expressions “digital asset” and “cryptocurrency”.
In about three minutes, the SEC took its stance and tried to show that Ripple was speaking and marketing XRP as if it were a security. The SEC lawyer revealed that they will focus on Ripple’s promotions and statements made in 2013 and 2015. He also spoke in detail about Brad Garlinghouse’s statements in which he expressed his belief that XRP will rise. They stated that Garlinghouse’s words could be understood as XRP is a stake in the Ripple company.
In addition, Hogan said he was “surprised” that the SEC’s lawyer did not mention the Kik Interactive case. He said this was “a big problem for Ripple” due to “negative litigation jurisdiction of the same court.” “Now, why don’t you even mention it when you get to the judge at your first chance for an opening speech? I do not know. But it was not revealed “he said.
Even more interesting was the statement made by Ripple’s attorney Andrew J. Ceresney, according to Hogan. Ceresney first focused on the “main arguments” by stating that XRP is a completely decentralized “digital entity” that has been “fully functional for 8 years”. In addition, Ceresney pointed out that there were $ 66 billion worth of transactions last month, saying that “most of them do not include Ripple.” Second, Ripple’s lawyer pointed to FinCEN’s 2015 statement that XRP was determined to be a “currency”. Additionally, he said that every country that makes a classification decision declares XRP as non-securities. Third, Ceresney stated that Ripple did without representing sales. He also said that the majority of sales were made on the secondary market without any contract. Ceresney then made a “smart move” by bringing up the Kik Interactive case:
“Ripple’s argument is that there is more pooling of proceeds in the Kik Interactive case and Telegram cases, and there is no pooling with Ripple. […] I hope Ripple can show this a little more in the future. ”
However, it eventually got more interesting. Ripple said that in 2019, the SEC was approached by “a major crypto exchange or maybe multiple exchanges” and said, “Can we sell XRP or is it a security? Please let us know. ” He pointed out that the SEC did not say “no” to his question:
“Now this is a big problem for the SEC and I don’t know how they got around it because what changed between 2019 and December 2020? […] This fragment was found during the first pre-trial exploration by Ripple, and it’s huge! There will likely be discovery disputes as the SEC tries to hide and Ripple finds the details […] and what causes the SEC to continue to allow exchanges to sell XRP. ”
As Hogan emphasized, Ripple’s lawyer Solomon said, “We found some evidence that the SEC had negotiated with top market actors, including stock markets, in 2019 and before, and did not tell these actors that it believed XRP was a security or an investment contract. And as this case progresses, these facts will come to light and it will become clear that XRP cannot be defined as a security. ” used the expressions.