A famous pro-Ripple attorney, John Deaton, has come out against the activities of the U.S. Securities and Exchange Commission (SEC) in the lawsuit against Ripple Labs and co-defendants. Deaton represents over 75,000 people who have been impacted by the SEC v. Ripple case.
According to Deaton, the American policy website RealClearPolicy (RCPC) published an article on Thursday headlined “The SEC Is Not the King” that explained the background of the high-profile case.
In a complaint filed in late 2020, the SEC claimed that XRP, Ripple’s native cryptocurrency, should be considered a “security” under the Securities and Exchange Act of 1934. The cryptocurrency sector was rocked by this decision, and the value of XRP promptly dropped by more than $15 billion.
On July 13, 2023, Judge Analisa Torres ruled against the SEC’s contention that XRP sales constituted securities transactions, marking a turning point in the case. The judgement was significant because it clarified that only a subset of Ripple’s XRP sales, those involving institutional investors and written agreements, were securities under the law. Innocent investors suffered greatly as a consequence of the unraveling of the larger SEC case, which had cost an estimated $100 million in defense fees.
In addition, information emerged that cast doubt on the SEC’s sincerity and openness. Public declarations to the contrary notwithstanding, the SEC’s general counsel privately maintained the view that cryptocurrencies such as XRP were securities. The lawsuit filed against Ripple was the catalyst for this discovery.
John Deaton tweeted, “The SEC harmed a lot of innocent people in the process,” in reaction to the RCPC piece, expressing his dismay at the agency’s conduct. For the last three years, 75,000 financiers, users, developers, and small enterprises have been yelling “exactly the above.”
The remarks were made by Deaton after he criticized the SEC’s appeal approach in a blog post titled “The Irony of Interlocutory Appeal” on Thursday. An online commentator opined that the SEC’s decision to file an interlocutory appeal after its first defeat was an effort to save face. Deaton speculated that Judge Torres would approve this petition, providing her with the opportunity to elaborate on her decision and maybe rendering it “appeal-proof.”