The legal battle between payment company Ripple and the U.S. Securities and Exchange Commission (SEC) carries on. Going in on its second year, newly released documents could provide the payment company with an advantage over the Commission.

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Starting on December 2020, the regulator accused the company and two of its executives of offering an unregistered security, the token XRP. When the legal battle began, it seemed one-sided in favor of the SEC, but time seems to be working for the benefit of the payment company.

According to Eleanor Terret, a journalist at Fox Business, and James K. Filan, a former federal prosecutor closely following the case, two memos dating as far as 2012 might shed new light on the case. The documents revealed that Ripple conducted legal analysis on the XRP token at that time.

The analysis was conducted by Perkins Coie, an international legal firm based in the U.S. specializing in commercial litigation, regulatory legal advice, intellectual property, with clients such as Google, Amazon, and Facebook. The first of these memorandums is dated February 8, 2021.

At that time, Chris Larsen and Jed McCaleb, Ripple co-founders, were working on developing the decentralized network that will be known as Ripple Network and its underlying token, called Ripple Credits in its early stage. The first report, Filan said, claimed XRP would have been classified as a security.

This is why the company changed its business plan and requested Perkins Coie a second analysis delivered in October 2012. The second document was optimistic and concluded that the token “should not be considered a securities”, but did mention potential risks, as Filan said, that the SEC could differ.

James Filan believes the memos demonstrate the company’s intention to be compliant, and it was assessing any potential risk 5 years before digital assets became relevant for the U.S. regulator. The legal expert added:

It seems to me that Ripple was being very proactive, which is very important.  There certainly is nothing in these memos that suggests that Ripple was being reckless or ignored any substantial risks.  In fact, the memos suggest the opposite – that Ripple was being careful.

According to Ripple’s General Counsel Stuart Alderoty, the documents concluded that XRP was “not an investment contract”. Therefore, the documents could weaken the case that the regulator has been trying to build for over a year. Alderoty added the following on the memos and the company’s thought process back in 2012:

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.

Brad Garlinghouse, CEO at Ripple and one of the accused by the SEC, said the following regarding the recent documents that came to light:

The truth is out for everyone to read. What we see is that the SEC waited 8 years to decide they disagreed with this analysis, decimating thousands and thousands of XRP holders (who they purport to protect) in the process. So much for being mission-driven…

Additional comments from Gabriel Shapiro, General Counsel at Delphi Digital Labs, weigh in on the memos. The legal expert believes similar documents would be unlikely to arrive at the same conclusion as the legal and regulatory landscape changed.

this just shows how much legal opinions have changed on token regulatory issues over the years

it's pretty obvious Perkins Coie would never write a memo in these terms today

that doesn't mean they or Ripple did anything wrong–it just shows legal/policy situations evolve https://t.co/Y3hhD30VBY

— _gabrielShapir0 (@lex_node) February 19, 2022

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XRP investors seem to be positively reacting to recent developments. As larger cryptocurrencies take a beating in lower timeframes, the sixth crypto by market cap trades at $0.83 with a 9% and 9.6% profit in the last day and 7 days, respectively.

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