A consultation provided to Ripple by law firm Perkins Coie in 2012 argued that the XRP token is not a security. However, experts noted a “small” risk that investigators SEC may disagree with this analysis.
The fact that Ripple had the foresight to seek legal advice from a prominent firm in 2012 – in the absence of clear case law and 5 years before the SEC even started talking about digital assets – should be applauded. 2/2
– Stuart Alderoty (@s_alderoty) February 18, 2022
“The conclusion from the 2012 public memos is clear: XRP is “not a security.” The fact that Ripple had the foresight to seek legal advice from a well-known firm — in the absence of clear case law and five years before the SEC even talked about digital assets — is commendable,” wrote Ripple General Counsel Stuart Alderoti.
According to attorney James Filan, the leaked documents are “generally favorable” for Ripple. In the first consultation dated February 2012, the lawyers emphasized that if NewCoin [раннее название XRP] will be distributed under a procedure similar to an ICO, the SEC will most likely consider it a security.
In the same year, Ripple revised its business plan and again turned to Perkins Coie. In October, lawyers noted that XRP tokens should not be considered securities, but there is a risk that the SEC will not agree with these conclusions.
The document provided to the company also suggested measures that Ripple can take to minimize this risk.
4/5 would disagree with Perkins Coie. The memos cover the full landscape of legal issues (not just the issue of securities) and I think show how careful Ripple was trying to be. Also, this was 5 years before the SEC really even started talking about digital tokens.
– James K. Filan ???????????????? (@FilanLaw) February 18, 2022
“It seems to me that Ripple acted very proactively, which is extremely important. There is nothing in these memos to suggest that the company was reckless or ignored any significant risks. In fact, the documents say otherwise – Ripple was cautious, ”Filan concluded.
In an October consultation, lawyers for Perkins Coie warned the company that any initiative to promote XRP as an investment opportunity raises the risk of potential enforcement by the SEC.
“We believe that this risk can be minimized through careful marketing efforts or by obtaining a no action letter from the Commission,” the note said.
Deaton Law Firm founder John Deaton noted that it was Perkins Coie specialists who helped former SEC corporate finance director William Hinman write speech for the Yahoo Finance conference in June 2018. Then the former official said that for various reasons, Bitcoin and Ethereum are not securities. He did not mention the XRP token.
After conducting this in-depth legal analysis of #XRPthe SEC enforcement staff DID NOT recommend filing an enforcement action against Ripple;
The next day, on June 14, 2018, Bill Hinman delivered the #Ether Free Pass Speech that Lowell Ness of Perkins Coie helped write ✍️;
— John E Deaton (@JohnEDeaton1) February 19, 2022
According to CoinGecko, against the backdrop of the publication of documents on February 19, the price of XRP rose by 10%, despite the negative market dynamics. At the time of writing, the asset is trading near $0.79 – quotes have corrected, but are still in the green zone.
Formerly Commission filed a motion with the court requesting that the draft of Hinman’s speech be suppressed. The community speculated that the original version might have stated that XRP was not considered a security.
Recall that in December 2021, Deaton Law Firm stated that The SEC showed more loyalty to Ethereum than to the XRP token.
In November of the same year, Fox Business published an extensive investigation SEC vs Ripple cases. The journalists came to the conclusion that the employees of the department behind the filing of the lawsuit could be affiliated with Ethereum.
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