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The Securities and Exchange Commission has repeatedly insisted it has provided clarity to investors on precisely how it determines whether a digital asset is a security, therefore subject to its regulation, or not. However, it is nearly a universal perception among digital asset investors and blockchain project developers that the SEC provides no clarity whatsoever, and its public statements and actions have only generated market confusion. In turn, this has led to what many have called “regulation by enforcement.”

Many holders of the XRP digital currency believe that they were unfairly harmed by the SEC’s lawsuit against Ripple Labs and its two top executives in December 2020, which crashed the value of their holdings and led to massive panic selling, suspension of XRP trading on exchanges, and $15 billion in forced losses to retail investors. Over 19,000 of them have joined a Motion to Intervene in the case, as neither the SEC nor Ripple represent their interests but they have been harmed by the lack of fair notice from the regulator who filed the enforcement action. The SEC has responded that all XRP holders should have known that XRP – which operates on a fully decentralized, open-source ledger, was a security from 2013 until the day the lawsuit was filed.

In response, these investors have crowd sourced a wealth of evidence that supports their conviction that the SEC failed to provide fair notice to the markets, and instead fostered market confusion which allowed for “picking winners and losers” rather than providing equal protection to all investors. Furthermore, in this climate of market confusion, the evidence suggests unfair advantages were granted to insider investors by senior SEC officials with conflicts of interest.

This page will be updated regularly as new evidence emerges.

[Last Update: September 18, 2021.]

March 23

Jay Clayton, Senate Banking Committee confirmation hearing

Jay Clayton is questioned by Sen. Elizabeth Warren (D-MA) over how he would be barred from voting on the SEC on matters involving clients of his law firm, Sullivan & Cromwell

Source: @Jungleincxrp
December 14

ConsenSys is “Building an Alliance” with SEC

Matt Corva says Joseph Lubin’s company, ConsenSys – a client of Sullivan & Cromwell, Jay Clayton’s law firm — has been “building an alliance with other blockchain companies, law firms…and regulators. We’ve had some talks with the folks at the SEC.” He is referring to the Enterprise Ethereum Alliance founded in 2017, which also includes Simpson Thacher & Bartlett, the law firm of SEC Director of Corporation Finance William Hinman.  The Alliance’s mission is “to drive the use of Enterprise Ethereum”.

Source: @digitalassetbuy

March 28

Investors Meet SEC, Ask for Free Pass on Ether

Andreessen Horowitz organizes a meeting of Ethereum investors and lawyers with the SEC to lobby for a free regulatory pass to ether, which was launched with an ICO in 2014 and has been sold in large quantities to investors for speculative purposes afterwards.

A participant in the meeting, Nancy Wotjas, later revealed that a group of Ethereum investors and a member of the Enterprise Ethereum Alliance, the law firm of Perkins Coie, gave the SEC the written proposals that the New York Times quoted as seeking a free pass for ether.

Source: The New York Times

April 23

Gary Gensler, MIT Business of Blockchain

Then-former CFTC Chairman Gary Gensler says there is not regulatory clarity in the digital asset markets, and “for Ripple” there “needs to be clarity in the market.”

Source: @LeoHadjiloizou

April 28

Hinman Exchange with Rep. Tom Emmer

At House Financial Services Committee hearing, Rep. Tom Emmer (R-OK) asks for specific definition on when a token is not a security. They discuss the definition of a “utility token” which does not fit the description of ether. Emmer asks what projects can do to “improve regulatory clarity” to prevent “enforcement actions by the SEC”, and Hinman replies that the SEC is “meeting with participants” with tokens that “they believe shouldn’t be regulated as a security and we work through with them how that may be structured.”

Source: @CryptoLawUS

April 30

Robert Jackson, CNBC

SEC Commissioner Robert Jackson says Chairman Clayton “has not seen an ICO that is not a security”.

Source: @digitalassetbuy

May 10

Charles Gasparino report on Brooklyn Project, Fox Business

Charles Gasparino of Fox Business has spoken to “major players in the cryptocurrency and blockchain industry” who are “coming together with a consensus” on an “organizational route” to ensure that “anything that is traded inside their blockchain to be considered a currency” and “given legitimacy”. He cites the Brooklyn Project, started by Joseph Lubin and figures linked to Ethereum, who “have a lot of friends on Wall Street.”

Gasparino also tweets that Lubin’s effort “seeks to create the first Self Regulatory Organization sanctioned by

@SEC_Enforcement”. The Brooklyn Project then tweets a “big correction”: “Not SEC sanctioned, and no current plans for a sanctioned organization.” Gasparino replies that he’d been told what he reported. This was about one month before the Hinman speech.

source: @digitalassetbuy
May 12

Joseph Lubin, keynote address at Ethereal Blockchain Conference, New York

Lubin says that “we need mechanisms” to allow for fundraising and token sales “despite the fear, uncertainty and doubt you’ve heard over these many months, we are making great strides in helping the people that make those decisions understand…”. This was one month before the Hinman speech.

Source: @BakkupBradley


May 17

Joseph Lubin, Fluidity Summit

One month before the Hinman speech, Lubin (after doing his “legal homework”) says ether was “never a cryptocurrency” and sold “very explicitly to software developers, to people who intended to use the system” and “not sold for speculative purposes.” He says “it never was a security.” (In fact, Ethereum co-founder Vitalik Buterin advertised the 2014 ICO as “an opportunity for anyone to purchase ether” which was “a currency inside the Ethereum system sort of like the XRP in Ripple.” Buterin also structured a sale of 500,000 ether tokens to Lubin’s college friend Mike Novogratz in 2015, which he said made him a hefty profit on the secondary market.)

Source: @digitalassetbuy
May 21

Tom Lee, CNBC

Tom Lee (ex-JP Morgan) makes elliptical comment that the SEC will declare that ether is not a security, causing a confused CNBC host to ask for him to explain. (Did Lee see a draft of Hinman’s speech?)

Source: @digitalassetbuy

May 24

Joseph Lubin, Viva Tech conference in Paris

Joseph Lubin of ConsenSys and co-founder of Ethereum says “we are able to issue” tokens that are not securities and describes apparent details of the Hinman speech almost a month before it is made.

source: @digitalassetbuy

June 5

Michael Novogratz, Bloomberg

Mike Novogratz, with whom Vitalik Buterin arranged a purchase of 500K ether tokens for speculative purposes in 2015, says “I bet dimes to donuts” that the SEC will say that ether “probably was a security but it isn’t anymore.” This was nine days before the Hinman speech (Did Novogratz see a draft in advance?)

Source: @digitalassetbuy

June 6

Jay Clayton, CNBC

Jay Clayton confirms that he sees most ICOs are securities. The host asks whether the SEC is “planning now to make a clear statement on that” and Clayton replies: “Bob, I hope I just did.”

Source: @Jungleincxrp

June 8

Joseph Lubin Interview

Joseph Lubin, co-founder of Ethereum and founder of ConsenSys, says that “we certainly need bodies like the SEC to scare many projects straight.”

Source: @digitalassetbuy

June 8

Joseph Lubin on his ETH “framework” with the SEC

Joseph Lubin, co-founder of Ethereum, describes how “we have a framework that enables us to sell consumer utility tokens, not in enormous quantities, not with discounts for large investors” and that purchasers “have to be accredited” and “demonstrate you will use these tokens on these platforms”. (Lubin does not mention that 500,000 ether tokens were sold in a private transaction to his college roommate, investor Mike Novogratz, in 2015. Novogratz said he later sold them at an enormous profit.)

Source: @digitalssetbuy 

June 13

All Five SEC Commissioners, Atlanta Town Hall

In the presence of all the commissioners of the SEC, Abraham Xiong of the Blockchain Chamber of Commerce, who says “there is not a lot of clear guidance” on blockchain technology from the SEC, and asks for an “official position” from the commissioners. Chairman Jay Clayton insists that “we have had very clear rules on how to conduct fundraising” and that “most of what I’ve seen in the ICO space is a securities offering. It is raising money for a project where I give you my money, you give me some type of write-back that reflects a return on your project. That’s a securities offering. And I don’t know how much more clear I can be about it.” This was one day before Hinman’s speech.

Source: @CryptoLawUS 

June 13

Hinman Deputy Amy Starr, Atlanta Town Hall Meeting

The SEC’s chief of capital markets trends at the Division of Corporation Finance, Amy Starr, says that if a token is “literally something that you are buying and you are only going to use it on an already existing platform, that you are buying to use, then I would say, “hey, that token is a use token” which may not have the characteristics of a security.” (This has been the experience of thousands of XRP purchasers and XRPL developers who would later be harmed in the filing of the SEC v. Ripple lawsuit in December 2020.)

This was one day before Hinman’s speech.

Source: @RaethonM

June 14

The Hinman Speech

The speech by William Hinman at the Yahoo Finance All Markets Summit which declares that “putting aside the fundraising” of Ethereum’s ICO, ether is not a security.

Hinman then commented on his own speech moments after giving it, saying that the speech was given because “the chairman and the SEC” felt they had to “be clearer” and “transparent” and give “guidance” about ether.

The SEC’s legal staff has frequently cited this speech to affirm in official SEC legal documents that “the Commission has publicly recognized Ethereum and its native currency Ether.”

Court filings indicate drafts of the speech were attached to at least 63 SEC emails before it was final, and the SEC refuses to identify who the recipients and drafters were inside and outside the agency.

After suing Ripple, the SEC and Hinman disowned this speech as being market guidance from the SEC, arguing it was only Hinman’s “personal opinion”.

Source: BankXRP and @CryptolawUS


June 21

Warren Davidson, CNBC

Rep. Warren Davidson (R-OH) indicates his impression that Hinman’s speech was market guidance on how the SEC will regulate crypto.

Source: @digitalassetbuy

June 26

Brad Garlinghouse , CBinsight

Ripple CEO Brad Garlinghouse mentions how Coinbase announced that they would list Ethereum Classic two days before Hinman’s notorious speech.

Source: @digitalassetbuy

June 26

Interview with Joseph Lubin, Consensys and Dominic Chu, CNBC

Days after the Hinman speech, a jubilant Lubin says he believes competitor Ripple is “massively overvalued”.

Source: @digitalassetbuy
June 26

Wall Street’s Crypto King Bart Smith on @CNBCFastMoney

Smith shows the market perceived that Hinman’s speech was market guidance that ether is not a security, and he adds that Hinman “left out” that other tokens didn’t meet the same criteria.

Source: @digitalassetbuy
July 9

Joseph Lubin RISE 2018

Joseph Lubin says Hinman’s speech contained “very interesting things about consumer utility tokens” – despite Hinman never using that term in his speech – and insists that the U.S. “does have regulations” for crypto.

Source: @digitalassetbuy
July 17

Michael Novogratz, Seoul Beyond Blocks Summit

Hedge fund investor Mike Novogratz says ConsenSys founder and Ethereum co-founder Joseph Lubin was a college roommate of his and is “a wonderful source for me and we collaborate,” adding that he is “talking to enough people in the ecosystem who are talking to the regulators every day.”

source: @digitalassetbuy

August 20

Jesse Powell at Distributed 2018: Navigating Crypto Exchanges

Jesse Powell, the CEO of Kraken crypto exchange, clearly indicates market perception that Hinman’s speech was SEC market guidance that lacked clarity beyond bitcoin and ether not being securities.

Source: @digitalassetbuy

September 17

Joseph Lubin Warns of “Reckoning Coming”, Firstmark

Joseph Lubin, co-founder of Ethereum, after ether obtained its regulatory pass, warns of “a reckoning coming” from the SEC for “certain projects.”

Source: @digitalassetbuy

September 17

Joseph Lubin Reframes Ether as “Consumer Utility Token”, Firstmark

Joseph Lubin, co-founder of Ethereum, describes ether as a “new way of organizing for collective action” since its purchasers are “forced to pledge” or “constrained” to “using the token on the network” and cannot speculate on them for profit.

Source: @digitalassetbuy

November 5

Bill Hinman, Georgetown Law Fintech Week

Bill Hinman makes clear his June 2018 speech was market guidance from the SEC, not just from him: “It was the first that that we expressed to the world that we didn’t view ether as a security as it was then currently being offered.” Again referring to the speech, he said “we also, last summer, spoke a little bit more about how we were looking at” ether and bitcoin, and “we made it very clear that we don’t see a reason to regulate those as securities.”

Source: Professor Chris Brummer (YouTube)
January 19

Joseph Lubin, DLD 19

Joseph Lubin says “we are big friends and fans” of the SEC and praises its application “of something called securities law”. He adds that the SEC has “introduced a new construct called decentralization” into their regulatory thinking, mentioning that they see bitcoin and ether as “decentralized” and that “no transactions involving those particular assets are considered to be” securities. But mentions that “they have not said the same about other tokens” – specifically XRP – claiming to know that the SEC is not going to find any token other than bitcoin and ether to be decentralized, dropping in Hinman’s name.

source: @digitalassetbuy
March 6

Patrolling the Block: Regulators Panel at DC Blockchain Summit 2019

SEC Senior Advisor for Digital Assets Valerie Szczepanik describes how the SEC defines whether a digital asset is a security.

Source: Chamber of Digital Commerce
April 27

Joseph Lubin, Investopedia

Joe Lubin co-founder of Ethereum admits that “according to legal analysis at the time we conducted the sale (of ether), it failed a prong of the Howey test”

source: @ISO_XRP

May 15

Michael Hoke, Senior Counsel SEC

Michael Hoke, Senior Counsel at U.S. Securities and Exchange Commission points to William Hinman’s June 2018 speech as guidance.

Source: @digitalassetbuy

June 25

Robert Jackson, CBinsights

SEC Commissioner Robert Jackson makes it clear that Hinman’s June 2018 speech was guidance to the market, using the word “we” multiple times and saying the speech “gave a set of principles that the market can follow.”

Source: @digitalassetbuy

September 12

Former SEC Counsel Nancy Wotjas Reveals Hinman Speech Lifted from ETH Document

Nancy Wotjas of Cooley LLP, former counsel to the SEC Chair, reveals she participated in the March 2018 meeting organized by Andreessen Horowitz, where a proposal written by the law firm of Perkins Coie, a core member of the Enterprise Ethereum Alliance, was submitted asking for a free pass for ether. She adds that “most of” Hinman’s June 2018 speech was lifted from that proposal and “meetings that we had.”

Wotjas adds that the SEC later told her it disagrees with Hinman’s speech that tokens are mutable and can change. She also suggests entrepreneurs should fight the SEC, which is “determined to make their life hell.” She warns that ‘if we want to lose blockchain to the Russians… continue on this course,” and says the SEC is “creating regulation by enforcement.”

Source: @digitalassetbuy
November 19

SEC Commissioner Robert Jackson Talks to Market Participants

SEC Commissioner Robert Jackson tells a meeting of market participants says that Hinman’s speech was market guidance, and that the SEC is regulating ad hoc instead of conducting formal rulemaking, since any formal rule could become obsolete in a matter of months. He describes the lack of clarity and ad hoc guidance as a deliberate strategy set forth by Chairman Jay Clayton.

Source: @digitalassetbuy

November 20

Vitalik Buterin, Coinbase Speaker Series

The creator of Ethereum tells Coinbase CEO Brian Armstrong how “we” are “getting rid of” the network’s proof of work mechanism to replace it with one “entirely based on proof of stake”. He adds that this transition depends on Ethereum’s users “abandoning the $50 billion base layer that they know and love and move to the one we consider better. It’s still a leap that people have to take.”

This was one month before the SEC filed the Ripple lawsuit.

Source: @sentosumosaba

December 22

SEC Sues Ripple, Garlinghouse and Larsen

On the last day of Jay Clayton’s tenure as SEC Chairman, the SEC files its bombshell enforcement action against Ripple Labs and its two senior executives, alleging that XRP has been an unregistered security since 2013. The price of XRP plummets and exchanges begin to suspend trading, causing panic selling and a loss of $15 billion in value to retail investors and project developers using the XRP Ledger. The SEC would go on to allege in its amended complaint that XRP has no utility other than as an investment contract in Ripple, and all market participants should have known it was a security from 2013 to the present date. (Unlike with ether, there was never an ICO for XRP.)

The SEC would later attempt to disown any notion that the June 2018 Hinman speech represented market guidance of any kind and was merely his personal opinion. In an affidavit supporting the SEC’s motion to stop him from being deposed in the case, Hinman said that speech “was intended to express my own personal views.” (The motion failed, and the judge ordered Hinman to be deposed.)

The SEC was also forced to admit in court that it had never opened an investigation into whether ether was an unregistered security. Ether was issued in an ICO and later sold in enormous sums by the Ethereum Foundation for speculative purposes to investors, including Joseph Lubin’s college roommate.

July 15

Joseph Lubin, The Coin Rush (CNBC)

Ethereum co-founder Joseph Lubin describes how the infrastructure of his network is still being built out, with a coming hard fork to introduce a proof of stake mechanism that will “absorb” the existing Ethereum network.

(Note: This will convert their network token to one with the utility that XRP has had since inception.)

Source: @ISO_XRP

August 3

Gary Gensler, Aspen Institute

SEC Chairman is asked about a lack of clarity on crypto rules, and insists that “we’ve been awfully clear on a bunch of this stuff” and that “Jay Clayton was pretty clear three and a half years ago. I think that 75 cases in this area have been clear…”

Source: @Jungleincxrp