As the fifth anniversary of former SEC official William Hinman’s speech on cryptocurrencies draws near, crypto law expert John Deaton sheds light on the potential impact of related email exchanges on Ripple and Coinbase. Deaton’s insights could provide a new perspective on the controversial issue of crypto regulation and the notorious suits against crypto companies.
The emails wont change the Howey analysis but they will likely show the difficulty in applying 1930s/40s precedent to modern day technology. The emails will likely help @coinbase and @ripple in the Court of Public Opinion and hopefully drive bipartisan efforts in Congress. https://t.co/DfpZaLgw4O
— John E Deaton (@JohnEDeaton1) June 11, 2023
On June 14, 2023, crypto stakeholders will commemorate the half-decade anniversary of the Hinman speech, which, according to Brett Redfern, former Director of Trading & Markets, could potentially incite “market confusion” or “more speculation.” Deaton echoes this sentiment, questioning the rationale behind delivering such a speech that could disrupt the already volatile market.
Read: Will the Release of Hinman Documents Follow the “Buy the Rumor, Sell the News” Pattern for XRP?
Howey Test: The Real Holy Grail?
The Howey Test, a precedent from the 1930s and 1940s, serves as the litmus test in identifying transactions that can be classified as securities. This analysis requires that any transaction comprising an investment of money in a common enterprise, with profit expectations based on the efforts of others, must be considered a security.
Deaton asserts that the emails linked to the drafts of the Hinman speech would not alter this analysis. However, he contends that their real value lies in showcasing the challenges in implementing decades-old precedents to the ever-evolving domain of modern technology.
Game Changer For Ripple & Coinbase
Deaton opines that the release and examination of these emails could prove beneficial for Ripple and Coinbase, predominantly in the court of public opinion. The email discussions surrounding the speech could highlight the challenges in applying the Howey test to cryptocurrencies, thereby enhancing public understanding and sympathy towards Ripple and Coinbase’s plight.
The contents of these emails, according to Deaton, might also prompt bipartisan efforts in Congress. The hope is that this increased understanding and subsequent pressure could lead to the formulation of more favorable legislation concerning cryptocurrencies, ensuring their more seamless integration into the mainstream financial system.
