The ongoing legal battle between the U.S. Securities and Exchange Commission (SEC) and Ripple, the company behind the XRP cryptocurrency, has taken a new twist. John E. Deaton, an attorney who filed an amicus curiae brief on behalf of XRP holders, has revealed some details of the lawsuit drama in a recent interview.
Deaton is the founder and managing partner of Deaton Law Firm LLC, a boutique law firm that specializes in complex litigation and class actions. He is also an XRP investor and a vocal supporter of Ripple and its cryptocurrency.
Deaton decided to get involved in the SEC vs. Ripple case after the SEC filed a lawsuit against Ripple and its executives in December 2020, alleging that they sold XRP as unregistered securities. The lawsuit caused a massive drop in XRP’s price and led to many exchanges delisting or suspending XRP trading.
Deaton filed a motion to intervene in the case on behalf of over 12,000 XRP holders, arguing that the SEC’s actions harmed them and violated their due process rights. He also filed an amicus curiae brief, which means a “friend of the court” brief, to provide additional information and arguments that the court may find helpful.
Deaton’s Insights and Predictions
In an interview with CryptoLaw US, Deaton shared some of his insights and predictions about the SEC vs. Ripple case. He said that he believes that the SEC’s lawsuit is “unprecedented” and “unconstitutional” and that the SEC has failed to provide a clear and consistent definition of what constitutes a security in the crypto space.
He also said that he thinks that the SEC is trying to pressure Ripple into a settlement that would include a large disgorgement amount, which is the repayment of ill-gotten gains. He estimated that the SEC is seeking around $770 million from Ripple, which is the total amount of XRP sales to institutional investors.
However, he said that he expects Ripple to fight back and use the Morrison v NAB case as a defense. In that case, the Supreme Court ruled that the SEC only has jurisdiction over U.S.-based sales. Deaton said that this would significantly reduce the disgorgement amount that the SEC can claim from Ripple.
Deaton also said that he is optimistic that Ripple and XRP holders will win the case or reach a favorable settlement. He said that he gives Ripple a 90-10 chance of winning and that a settlement under $20 million would be a “99.9% victory” for Ripple.
He also said that he is confident that XRP will not be deemed a security by the court or by the SEC. He said that XRP has many use cases and functions that are independent of Ripple and that XRP holders are not relying on Ripple for profits or dividends.
Deaton said that he hopes that the SEC vs. Ripple case will lead to more clarity and regulation in the crypto industry and that he will continue to advocate for XRP holders and their rights.
XRP Price and Market Reaction
The XRP price has been volatile and affected by the SEC vs. Ripple case. After the lawsuit was filed, XRP plummeted from around $0.58 to $0.17 in a matter of days. Since then, XRP has recovered some of its losses and is currently trading at around $0.61, according to CoinMarketCap.
The XRP market has also been influenced by other factors, such as the adoption of XRP by various platforms and institutions, the development of the XRP Ledger, and the sentiment of the crypto community.
XRP holders and supporters have been rallying behind Ripple and XRP, using hashtags such as #RelistXRP and #XRPCommunity to voice their opinions and demand justice. They have also been following the developments of the SEC vs. Ripple case closely and expressing their hopes and expectations for a positive outcome.
The SEC vs. Ripple case is expected to conclude in the first half of 2024, unless a settlement is reached before then. The case is being presided by Judge Analisa Torres in the U.S. District Court for the Southern District of New York.
