You are currently viewing John Deaton Interview – SEC Ripple XRP Lawsuit Summary Judgment, Settlement, Amicus Briefs, Ethereum, LBRY

Attorney John Deaton joins me for another interview to discuss the latest with the SEC Ripple XRP lawsuit. We touch on the recent summary judgments from Ripple and the SEC, whats next for the procedural process, likelihood of a settlement soon, Chamber of Digital Commerce Amicus Brief, will the SEC target Ethereum as a security, LBRY, and much more


Welcome back to the “Thinking Crypto” podcast, your home for cryptocurrency news and interviews. With me today is attorney, John Deaton. John, great to have you back on the show.

  • Thanks, Tony. Thanks for having me as always, man. I appreciate it.
  • Well John, I have lots of questions for you and I know you’re a busy man, you got a lot on your plate. But let’s talk about the Ripple lawsuit. What’s new? We saw summary judgment statements from both parties, the SEC and Ripple, and certainly wanna touch on the amicus briefs from the Digital Chamber of Commerce as well as yours, and much more. Let’s start with the summary judgments. What was your take on both?
  • All right well, just procedurally, ’cause I think there’s some confusion out there. So what people need to understand is that a summary judgment is an offensive motion. It’s offense. So, Ripple filed a summary judgment motion saying that there’s no reasonable jury that could ever think that they violated the law and neither should the judge. And the judge should just find that XRP is not a security as a matter of law. And they don’t get into the fair notice defense. They don’t get into any of that, ’cause it’s just about the law and the token and how it’s not a security. And then the SEC in their motion for summary judgment, they’re saying that they proved and they cite evidence and stuff that they proved that Ripple engaged in this scheme starting in 2012, and that any purchase of XRP is violating the U.S. securities laws. And so they each filed their summary judgment and now we have to wait for Ripple to give an opposition to the SEC’s. That’s when you’ll hear about the fair notice defense. Because if you look at the two motions right now, the only one that brings up fair notice is the SEC, because they have to address Ripple’s affirmative defense, saying they didn’t lack notice. But it’s called a fair notice defense. So, it’s defensive. So, Ripple will bring it up when they’re defending what the SEC filed, and the SEC will write an opposition to Ripple’s. Those are due around the 18th of October. And then each side gets to do a reply. So, Ripple moved for summary judgment, the SEC opposes it. Ripple gets to reply to the SEC’s opposition. Same thing for the SEC. They filed their motion, Ripple opposed it, they get to reply. Those replies are due somewhere around November 7th to the 15th, somewhere in there in November. I don’t have the dates memorized. So, all of the briefing will be completed by mid-November. And that’s when, then the clock begins to tick on how long will it take for Judge Torres to write a decision in a room. And so that’s sort of the procedural landscape that’s happening right now. Ripple’s summary judgment motion, I’ve stated before when it first happened that it’s a brilliant argument. In many ways I hate it because it’s not like red meat. It’s very much about the law and how the Securities Act of 1933, what they meant. And they incorporate all the different state laws around the different states of the country that help form that statute. So, they’re getting into a lot of statutory intent and things. That’s why they cite things like the pre-1933 Blue Sky laws. Stuff that you normally don’t hear of. And Ripple’s argument for summary judgment is that in their research, that you have to have a contract before anything else. And there has to be, it’s called an investment contract that you have to have a contract. And before you even get to the Howey Test, if the judge doesn’t find an underlying contract, you don’t even get to Howey. And then they say, “Well Judge, if you disagree with us, “you find that you disagree “that we don’t have to have an underlying contract, “well you should find for us, “because the four factors of Howey don’t apply to XRP. “There’s no common enterprise. “XRP holders didn’t rely on the efforts of Ripple. “We win that way.” So, that’s basically Ripple’s argument. The SEC’s argument, I gotta tell you, I was proven wrong about something, Tony. I actually predicted that there would be more damaging evidence against Ripple that we didn’t know about. Because we’re not privy to depositions and the documentary evidence, any of that. And so I figured that there’s gonna be a couple things, there might be a couple bad days for Ripple publicly, that people would take shots at it, the haters would be able to cling on something. And I was shocked because it’s really not there. There’s no there there, so to speak. And it basically is a marketing case against Ripple. Because Ripple sold XRP. They sold XRP to accredited investors, to venture capitalists, and they sold it on exchanges to the public. That’s a fact. Brad Garlinghouse, Chris Larsen. And so the SEC is basically saying, they’re going with a different argument. Ripple’s saying you have to have a contract, then you apply Howey. The SEC’s gonna argue that you don’t need a contract, that the language of Howey is that a contract, transaction, or scheme equals an investment contract. And they’re gonna cite case law for that. And they’re gonna say that it’s the scheme, that even though there’s no contract between XRP holders and Ripple, that Ripple devised this scheme to create a secondary market and to sell XRP, give it away to some people, get selling going, establish liquidity. And they didn’t have a use case and they didn’t get a use case until 2018 with ODL. And then they sold that to fund their business, their very ambitious business. And the problem with the SEC’s argument, though, is that they had to concede during the litigation that Ripple owes no obligation to XRP holders. And that you owning XRP, Tony, you have no claim to Ripple. And Ripple could stop using XRP and decide that Bitcoin is the coin of choice and they’re going to use Bitcoin for their LDL, and they’re never using XRP again. You and me as an XRP holder, we’ve got no claim. We can complain. What’s missing in the SEC’s case is that issue, which means where’s the common enterprise? The common enterprise in the complaint was Ripple, that we are investing in XRP because of the management team of Ripple and we’re in a common enterprise with Ripple. And now that that’s out, that there’s no obligation, they then went with an expert witness who said that the entire XRP ecosystem was the common enterprise. That would mean you, me, Coinbase, when they listed Uphold that listed today, developers around the world, everybody is part of this ecosystem and we’re all in it together. And so that’s the common enterprise. But, I know I’m going a long time, but they didn’t rely on experts. And that’s something I do wanna talk to you about. They didn’t rely on any experts. So now, what is the common enterprise? And I won’t be surprised if we see in their other papers that the common enterprise, and this would come in their reply in November, is the XRP ledger. Because we all sort of have this interest in the XRP ledger, the XRP being the native token. That’s absurd because that’s a software network. How is a software network a common enterprise? But that’s basically an overview of where we stand with the summary judgements.
  • So to your point, there’s still a lot of procedural things that have to happen. There’s certain specific dates, October 18th and then subsequently in November. This thing could potentially wrap up next year, right? Based on the updated facts, are you thinking we see some sort of conclusion some time next year?
  • Yeah, unless there’s a settlement, there will be no decision before the end of this year. I’m confident in saying that it’s never gonna happen, because the briefs and everything’s going to be due, say mid-November, and then the next week you got Thanksgiving and then you got Christmas and you got holiday season, and it’s just never gonna happen. And even if there weren’t any holidays, do you think Judge Torres and her clerks can put together a decision of this magnitude in six weeks? It’s just never gonna happen. So, people gotta get that outta their mind. If there’s a settlement, fine. That’s one way that it resolves. But if it does not settle at all, if this case never settles, then the earliest. I know it’s bad news, man. But the earliest, the very earliest that I would expect it would be the end of March. But there’s a good chance and even Brad Garlinghouse, and it’s gotta be based on what his lawyers are telling him. Brad Garlinghouse said, “Look, I’ve been told this takes “between two and nine months.” So, I won’t be surprised absent a settlement that May 1st comes and we’re still waiting. So, people just gotta like, you know, accept that reality. Maybe it resolves and settles and we don’t gotta worry about that, but we’ll see.
  • Yeah, it is what it is as far as the timeline. So if there is a settlement, and I know this is a bit of speculation, what do you think that looks like? Is Ripple paying a fine for 2013, 2015? XRP is free to then be re-listed on exchanges, things along those lines?
  • Yeah, at this point, Stewart Alderoty who’s the general counsel of Ripple, Brad Garlinghouse, the CEO of Ripple, they have both now publicly said on more than one occasion that they won’t settle unless ongoing and future sales of XRP by Ripple or anyone else in the secondary market are not considered securities. So the problem with the settlement, Tony, is that it would require the SEC to agree to some kind of statement. It could be in writing, it could be publicly announced, but they would have to agree that moving forward, XRP is not gonna be considered a security. And the SEC doesn’t like to do that, except for Bill Hinman. The SEC normally doesn’t like to kind of give that kind of clarity to one token, allegedly. The problem that I see is more of a political one, which is you sued Ripple, saying XRP’s a security, including secondary market sales. And then you want to go after all these other cryptos. How do you reconcile saying XRP is not a security, but XLM is? XRP is not a security, but ALGO is? XRP is not a security, but ETH today is? I’m not saying it’s done, I’m just saying that that is a very narrow, narrow, like you gotta thread the needle on that one, man, to figure out how you can publicly do this and then still be able to go after other cryptos. And so I haven’t changed my mind, Tony. Without the pressure of the hidden emails and the documents that need to be turned over, if the SEC is not forced to do that, I don’t think they settle. I know people disagree with me and that’s fine. You said it best, I’m speculating. I’ve always made it clear that just because I’m amicus counsel, I don’t have any more insight. Your guess and speculation is just as good, just as valid as mine. My opinion is it will not unless Gary Gensler is forced. Because a lot of people think that, “Well, he won’t risk a judgment “because it hurts him against other crypto.” And I understand that. I’ve said that myself at times. But we go back to how does he say XRP is not a security, but the other ones are? It’s a very delicate situation. And I did a tweet today where a lot of people were thinking, “Oh, Ripple’s gonna win for sure “because of their initial brief. “They don’t even get to the Howey test.” That doesn’t mean the judge is gonna agree with that. That’s a very, very, very novel concept for today, and it would mean that she has to disagree with Judge Castel and Telegram and other appellate judges. And she would have to disagree with them and agree with Ripple, and she might not. So, I think that XRP holders, because we feel confident. You can’t get blinded by your bias or your emotion or your passion or your conviction. But if Gary Gensler’s told by the judge, “You’ve run out of appeals. “Can’t go to the 2nd Circuit. “Your writ of mandamus has been denied. “You have 10 days.” And let’s say it’s December 1st. “You have 10 days to turn over all those emails, “all those comments, all those drafts. “And if in those drafts and in those comments “are discussions of XRP.” “Why isn’t XRP being given a pass? “Hey, if you’re saying it about ETH, “just say it about XRP.” I’m not saying that’s in there, but I believe there’s going to be somebody. Somebody’s gonna say, “What about XRP?” If that’s in there and even if it’s even better, that could be a guaranteed victory for Ripple. And that’s when they say to Gary Gensler, “We’re definitely losing, and so settle today, “see if you get 50 million. “And we’re just gonna have to say “that XRP is not a security. “We’ll figure out a political way to do it “and still go after the other ones. “But you’ll be able to go on ‘Thinking Crypto’ and say, “‘I enforced the securities laws “‘and I brought Ripple to the table “‘and I forced them to acknowledge their wrongdoing “‘between 2012 and 2017 or whenever.’ “‘They paid 50 million, 100 million, “‘whatever it is, 25 million. “‘And I’m forcing this issue “‘because these tokens violate securities laws.'” He could spin it into a win. But until he’s placed in a political quagmire. “You’re definitely gonna lose, Gary. “You need to settle. “We don’t want these documents turned over, Gary, “’cause they say some shit “we don’t want the public to know.” Until something like that happens, I think he’s okay with going to judgment, man. Because listen, at MIT, he’s on video saying it’s for a court to decide. If the executive order leans towards the CFTC, if the Lummis bill leans toward the CFTC, if the bill that’s in the House leans toward the CFTC, if he sees that the political momentum is to the CFTC anyways, well he might be willing to roll the dice and maybe he gets a verdict, a judgment in his favor. He can turn around and say, “Look, I told you it was a security “and if XRP is a security, “then they’re all securities.” Gary Gensler, Tony, would sound like you and me. You and I and others in our community have been saying to the rest of the world, “Look, if there’s a judgment “and it is deemed that XRP, “today’s XRP is a security, “then almost every altcoin is. Maybe not Litecoin, maybe not Doge or Bitcoin forks. Maybe not, but ETH certainly is. XLM certainly is. You know what I mean? ALGO certainly is, in my opinion. Cardano, they’re all going to be implicated. And so that’s sort of the way I look at a potential settlement.
  • Let’s talk about the amicus briefs. Obviously you’re a friend of the court representing 70,000 plus XRP holders. Recently, the Chamber of Digital Commerce filed their respective amicus brief. I spoke to the lawyer earlier today and I would love to get your take on your respective brief, the Chambers’ brief, and then potential others entering into this mix.
  • Yeah, yeah. I believe there’s going to be, if I had to predict, I’m not gonna necessarily say who because I don’t wanna out somebody and then they don’t, and then I look like a dick, you know what I mean? But if I had to predict, I would say in addition to the one I’m going to file, there’s gonna be at least two others, which would be four amicus briefs being filed in this case. And so I think people have accepted now, two things are why I believe that. One is finally, Tony, what you and I and the XRP community have been saying to the rest of the crypto world since December 22nd, 2020, that the SEC’s coming after crypto. And don’t just let them say this is just an XRP thing. You’ve been preaching this, I’ve been preaching it. I think they see that. I mean, the day after The Merge, the day after, Gary Gensler all of a sudden implicates The Merge. And says that quote, “The proof-of-stake Merge could implicate securities laws.” And then a week later, we see in the suit against the influencer or whoever the argument that the SEC has jurisdiction over all Ethereum transactions.
  • That was the Ian Balina lawsuit.
  • But because of the nodes being 40%. But Tony, what does the SEC have jurisdiction over? Securities.
  • So if the SEC says that they have jurisdiction on ETH transactions, what are they saying? They don’t have jurisdiction over commodities. I mean, that’s as close as coming out and saying, “I’m coming after you,” as it gets. And I think that because of that, people now accept Gensler is trying to kill this market, or crush it to the point that the incumbents can come in and get it for dimes on a dollar. Crush an exchange, maybe Goldman Sachs comes in and takes 25% or 49% of an exchange, whatever. And then all of a sudden when those incumbents are in and have a bigger slice of this pie, then all of a sudden we might see Gary Gensler say, “Well, crypto’s a great innovation “and we’re working with the entrepreneurs and technologists “and we’re gonna come to a decision.” And then all of a sudden, whatever crypto’s blessed, say it’s ETH, or XRP, doesn’t matter. It’ll become the investments of a lifetime. Because who has the big slice now? I just think that they see that. So, I can’t imagine that they’re not gonna, I just think that the blinders are off. This isn’t just about XRP, this really is an outrageous, unconstitutional, unlawful government land grab for this industry and we have to do something about it. So, that’s why I think there’ll be others. You know what I mean? Listen, I love the XRP holders and God bless them. To be honest with you, they defend me because they appreciate the work that I’ve done. And so I see tweets out there of like, “Deaton’s been here from the beginning,” whatever. And then they’re like, “Too late.” And I take the opposite of you. We gotta get past the tribalism. We gotta get past any of that. We have a common enemy. And we want technology to flourish. And let the winners be the winners. And you know, if ETH flips Bitcoin, let it happen. If Bitcoin takes 80% market share, let it happen. If XRP flips ETH and that’s the way the market says, let it happen. And let’s put all our energies against them. So, I welcome that. I was very happy and thankful. I DM’d Perianne Boring and was like, “Great job. “Thanks.” It wasn’t Bruce Willis looking out the window saying, “Welcome to the party.” It’s sincere, saying, “We want that.” And they made good points. It’s gonna be very different than what I file. Because for one, we have been in this from the beginning. We are amici counsel. I mean amici. We are, we don’t have to ask. I still have to ask for permission for her to accept my brief, but we’ve been designated. So, it’s gonna be different. I am taking a position. The Digital Chamber Commerce is more like, “Judge, we’re not taking a position for Ripple, “against Ripple, for the SEC, against, “but we want you to be very concerned with your language.” That’s really what they’re saying to the judge. Like, “Please make sure that there’s a difference “between the underlying asset “and an asset that can be used.” And basically what they’re saying is that, and I’d be interested, I know you just interviewed the attorney, but they’re basically saying in so many words, more articulate than I’m going to right now that, “Hey, anything can be used as a security. “Oranges, chinchillas, whiskey, Bitcoin’s been used. “Beavers have been used. “Any kind of asset. “It’s all about the way you package it, market it, “offer it, and sell it. “And so don’t “focus on the token, “focus on how it was offered and the Howey.” And that’s important because the more the judge hears that, and I’m gonna say that too, of course, but I’m taking a position. But to some XRP holders’ surprise, I’m not taking a position on Ripple. Like I’m not gonna say, “Ripple didn’t sell a security.” That’s not my job. They got better attorneys to do that. I’m focusing on you. I’m focusing on me, I’m focusing on your mom that I know that brought XRP, and I’m saying to the judge that we need a declaration that secondary market XRP that is traded is not a security. As a matter of law, it’s not a security. And sure, is it possible that Ripple could have sold it a certain way many years ago? Okay. If they prove the case against Ripple on that day, that transaction, fine. But they’re trying to say, and they do say any purchase of XRP is a security. That’s still saying that XRP is a security. If any purchase, that’s their words, any purchase of XRP was an investment in a common enterprise where we expected to profit from Ripple’s efforts. That’s what they’re saying. So, they use the words, any and all. Any purchase, all XRP. So, I’m trying to get her to really distinguish that and make it clear and also other things. So, I wouldn’t be surprised if other amicis come out and they’re more aggressive. The Digital Chamber of Commerce, they could have been a little more aggressive. And that’s not a criticism, that’s an observation. But I think that they’re holding themselves out. Like, “Listen, this isn’t about a company. “We’re here to defend “the industry from being, “the assets being over-classified “or categorized in the wrong way. “And we want you to be aware of that.” And so it’s good. I’m very happy that they did it.
  • Now I wanna circle back to Ethereum, because a lot has changed since Bill Hinman gave a speech that Ethereum is not a security. Obviously you had The Merge to move to proof-of-stake, entirely different protocol going away from proof-of-work, which Bitcoin uses. And then you have Gary Gensler, Chair Gary Gensler not reiterating the same statements that Bill Hinman and Jay Clayton and Commissioner Jackson all said, that, “This speech was great. “It gives an example of how we’re viewing the asset,” and so on and so forth. He refuses to talk about Ethereum. He just talks about Bitcoin. And once again, I hold Ethereum. I don’t want Ethereum to be classified as a security. And my thoughts around this is it seems like Gary Gensler’s preparing, and to your point of what was outlined in the Ian Belina lawsuit of all transactions under Ethereum blockchain are under the SEC’s jurisdiction, are they looking to now say Ethereum is a security? It seems signs are pointing that way.
  • I believe so. But I also believe that they’re gonna sue Exchange. I think they’re gonna sue Coinbase. They may sue Coinbase and Kraken and FX all together. You know what I mean? Or it could be individual. Listen, I have to resist that temptation and be like, “I told you so.” All that shit, right? I don’t want to do that because there’s no need. But if you go back to a video I did a year ago, I said that ETH would be implicated. If Ripple loses and XRP. If XRP is deemed a security, ETH will be implicated. And you can’t rely on what one guy said when the official position of the SEC is that they don’t make official positions. If a Republican becomes president in two years, Gary Gensler’s gone. And that new chairman will think ETH is a commodity. Might think XRP is a commodity, whatever. And so these are political appointees who have agendas. And you know my feelings on Bill Hinman’s agenda. I think it was a personal agenda. But that doesn’t mean it ties Gary Gensler’s hands. What I warn people about was that they say, “Oh, the statute of limitations passed, “because the ICO was 2014.” When’s the new statute start beginning to run? Merge. If you go back to Bill Hinman’s interview, I would tell people, and I tweeted this out, he gave his speech, and there’s some qualifiers in that speech, but in his interview he said, “I’m just telling you, “if you set aside the fundraising, “today’s ETH “is not a security. “That doesn’t mean if circumstances change.” He literally said those words in an interview. “That doesn’t mean if circumstances change “maybe it would become a security.” So, yes. ‘Cause I think there’s a fundamental thing that Gary Gensler doesn’t believe. Hester Peirce, Robert Jackson, Jay Clayton, Bill Hinman. I know those four for sure. Elad Roisman, those five. They believe that an asset can start off as a security, but then over time it no longer would constitute a security, and the securities laws, the policies behind them doesn’t apply because they become sufficiently decentralized. Jay Clayton agreed with that in a letter to Congressman Ted Budd. It’s the Bill Hinman speech says that. Hester Peirce’s whole safe harbor provision is based on that concept that, “Hey, it can start off as a security. “We could say that about XRP. “When XRP was first sold “and there was no other developer on the XRP ledger “and there were no other XRP holders, “that first transaction, “if that investor just sat back “and relied on Ripple, could be a security.” It may be exempted because it’s an accredited investor and all that, but I’m just saying that you could make a good argument that that’s a security. But then, as I say to people, 2013’s XRP is very different than 2022’s XRP. 2013’s XRP ledger, very different than 2022’s XRP ledger. And so if you go back to Gary Gensler on my CryptoLaw site, we have his MIT videos, and I used it from the community, where he says a bunch of venture capitalists went into the SEC to argue that this transition, and he says, quote, “I don’t think it’s gonna work. “There’s no case law that supports an asset changing.” I think Gary Gensler believes once a security, always a security, and that that’s his fundamental approach. And so the proof-of-stake, why would he implicate it? I mean, right after The Merge. And so I think that, and like you. And I say to the XRP holders, it’s tough because the XRP holders, if we’re gonna end tribalism like Brad Garlinghouse says, you have to resist the temptation of, “No, you come. “Now you’re getting sued.” And there’s a difference between suing executives who may have broke the law. There’s a difference from wanting an investigation into the conflicts of interest and all of that. I support all that. But just like Brad Garlinghouse said, I don’t believe that today’s ETH is a security because I don’t believe the way the SEC applies the securities laws. Do I think it became more centralized than XRP? Yes. Do I believe that proof-of-stake, because the more tokens you have, the more weight you have. Like those are all issues, but I still don’t believe it meets the technical, legal definition of an investment contract, today’s ETH. So, I don’t want to see the SEC claim today’s ETH is a security. And to my XRP holders that I love, I would just say, “Listen, there’s innocent ETH holders out there. “There’s somebody who doesn’t give a crap about Vitalik “and what he said.”
  • My mom has ETH in her portfolio.
  • There you go.
  • She doesn’t know who Vitalik is.
  • Does she know who Joe Lubin is? So your mom, I go back to your mom, man. Your mom is an innocent XRP holder, innocent ETH holder. It’s not good for crypto for them to say, “Well, we’re just gonna erase “the last five years and now everything’s a security.” But as usual, the onus is on the XRP holder to take the higher road. And I know there’s people that support me and they’ll be like, “John, I love you, “but I want revenge.” I mean, I get it, I get it. But I just want to see this space foster. And somebody’s gotta stop pointing the finger. But listen, if Vitalik wants to tweet again that XRP holders don’t deserve protection, I’ll go after ’em again. Like I’m not backing away from anything I’ve said or done. I’m just saying that let’s target the people that deserve investigations or deserve inquiries versus the moms who own ETH, Bitcoin, XRP, a little ALGO, maybe some Quant, whatever. You know what I mean?
  • Yeah, and I know a lot of people, to your point. I’m not gonna name names, but like a family friend, she just loves like trading. And she’s like, “I do it on the train, I’m going home.” But she could care less who the hell Vitalik is or who did what. She’s like, “I just wanna flip it and make money.” Okay, well.
  • You know what, that’s called commodities trading. She’s a commodities trader, right? She’s trading Bitcoin and ETH and XRP or anything else. Maybe who you’re thinking of, maybe she made some good money on that run up of XRP from what, 35 cents to 55 or whatever it was. You know what I mean? I wish I was a trader. I could make some money. The first time I sell, it’ll go to the moon.
  • Last item here before I let you go, I wanna ask about LBRY. What’s happening there? Seems to be a delay in decisions there.
  • Well, I think we expected a result by now. The trial date is technically, if there’s a trial, would be October 3rd. But as I said to other people, if the judge, and he said this in the oral argument, he said, “We probably don’t want a jury to decide this.” Which sounds like the judge is going to say what Ripple wants and what the SEC want in their case, they want the judge to make the decision. So if there’s not gonna be a jury trial, then that October 3rd date, the judge can do what he wants. It could have come out while we’re talking, like we’ll see. I hope LBRY wins outright. I don’t think that’s gonna happen. I just don’t want them to lose outright. I want to see the judge say, “Okay, “the token’s not a security. “This one sale to some investment club, “that particular sale, they put in code storage “and they sat on.” You can do all that and say this specific sale was, but then use language that is helpful. Because obviously if the SEC were to outright win, it doesn’t mean that Judge Torres is gonna like agree with the judge in New Hampshire, ’cause it’s different laws, different circuit, believe it or not, different interpretation of Howey. In New Hampshire, in the 1st Circuit, they interpreted Howey a little bit different than the 2nd Circuit and the 5th Circuit and the 9th Circuit. And so when things get up to the Supreme Court, it’s when you’ll have differencing of opinions between the circuits. And then the Supreme Court will say, “Okay, we’re going to settle this.” “The 1st Circuit says this, the 2nd Circuit says that. “We’re gonna decide it.” Then they take the appeal. Before we go though, I do wanna, ’cause I know a lot of people watch your show and I wanna say something I said on Twitter. I want people, and I know this goes to you because you’ve been a participant in all of this, but XRP holders have impacted this case significantly. And I’m not just saying it, Tony, because I’ve been a part of it. But remember the SEC’s summary judgment motion does not rely on any expert witness. And I’m sure you remember all that litigation about the one expert who was gonna say what your mom thought when she bought XRP or what you thought. Remember, I’m not gonna name his name, but he became this Expert 1. And the SEC tried to throw me off the case because I used his name and I did some mean tweets. Remember all that? Well, I filed a motion saying to the judge, “Hey, we should be heard “and I should be able to write a brief on this expert “if he’s gonna talk about “what my people that I represent, what they thought. “Because I think he’s full of shit.” It’s gonna be like the legal, technical way to say it. Well, the SEC abandoned that expert. Did not rely on it. And part of the reason is we collected over 2,500 affidavits, sworn affidavits from people like you, XRP holders, who said, “Look, I bought XRP first day. “Never heard of Ripple. “Never heard of Brad Garlinghouse. “I bought it because I first bought Bitcoin “and it took like 15 minutes. “I thought I did it wrong. “Then I bought XRP and oh my God, “it was there in three seconds. “And I was like, ‘This technology’s great.’ Or, “I used the ledger,” or, “I used the decks,” or, “I’m a YouTuber and I received some of it as tips “and for content. “I didn’t use it as an investment. “I bought a new microphone,” Whatever, right? Like just we participated. And I didn’t send it to the judge, but I sent those affidavits to the SEC and to Ripple. And so if the SEC would have relied on that expert, we gave Ripple all that ammunition to challenge him and to get in all of that stuff. And so the SEC tapped out. And so that’s a huge, huge win for XRP holders, because in the summary judgment, and I’ll highlight this in our brief, Tony, they don’t offer any evidence about what we relied on. They say Ripple put it on their website, how to buy XRP. Well, guess what I can say. Here’s a CNBC article on how to buy XRP.
  • It was a video, I remember.
  • There was a video. I cite to the video. That’s what I’m saying is so you can’t prove that Tony’s mom bought XRP because she. They say because Chris Larsen tweeted something positive in 2014. I wasn’t even on Twitter in 2014.
  • My mom doesn’t know who Chris Larsen is. She doesn’t know what Ripple’s website is. She was just asking me, “Hey, I wanna get into cryptocurrencies. “Buy me the top five or something.”
  • And many of the affidavits were people saying, “Listen, I wanted to diversify “and I picked the top three.” What you just said, picked the top five. So, I bought XRP. My daughter, Jordan, is on there. Jordan, my daughter didn’t know. She knew that her dad was talking about cryptocurrencies, “The fourth industrial revolution, girls.” I had my daughters in high school in 2016 do a debate on Bitcoin. And so like ’cause I was getting into it. So my daughter was like, when she got 15 grand when she was 18 years old, she goes, “My dad’s always talking about crypto. “You know what? “I’m gonna just buy one Bitcoin for 10,000.” It was 10,000 at the time. “And I’m gonna take 2,500 and buy ETH and XRP.” That’s it. That’s all she did. Like she knows nothing about the technology. She knows nothing about the company Ripple. And whether that’s smart or not smart, that’s not the point. The point is, she didn’t rely on them. She was doing that. And there’s developer affidavits about developers independent of Ripple, SpendTheBits, stuff like that that had nothing to do with them. So, it’s just because I want them to know that taking the time, taking the effort, being willing to put an affidavit and put your name on it. Because a lot of people are like, “I don’t wanna highlight myself.” Like, they took a stand. They fought back and they need to be proud of themselves. And so like, and it had a huge impact. That’s what I’m saying.
  • Yeah, that’s amazing. Amazing to hear that. And I know a lot of people, it’s been painful after the lawsuit, and they saw their portfolio value go down, and they’ve been trying to amplify their voices and it’s great to hear that their voices are having impact.
  • It is, absolutely. And it will more because when we get off this video interview, I’ll start going back to the brief.
  • John, always a pleasure. And as always, thank you so much for what you’re doing.
  • Thank you, Tony, appreciate it.