The US Securities and Exchange Commission first charged Ripple Labs with illegal securities offerings almost six months ago.
The Securities and Exchange Commission has filed a complaint against Ripple Labs Inc. and two of its executives, who are also significant holders, alleging that they raised more than $1.3 billion through an unregistered, ongoing digital asset securities offering.
SEC’s Case May be Faulty
Many people in the crypto community believe the SEC’s case is faulty on multiple levels. In fact, it could be argued that the agency is aware of this. For beginners, the SEC informed Judge Netburn in a recent filing that a loss in the case would have far-reaching consequences, as future defendants would be allowed to use Ripple’s defense as precedent.
Furthermore, Jay Clayton, the ex-Chairman of the Securities and Exchange Commission (SEC), who initiated the lawsuit, recently co-authored an op-ed in which he seemed to repeat some of Ripple’s old talking points.
Against the background of Ripple’s small legal victories over recent months, do these developments sound as confident as the SEC has? The answer is negative according to many.
Attorney John Deaton has already made headlines for filing a motion to intervene on behalf of XRP investors in the aforementioned lawsuit.
In support of XRP holders, Deaton also argued that the SEC had disputed the independence of XRP. This led XRP Holders to intervene in order to “develop the Court’s understanding of XRP’s current use, technology and development.”
While Deaton has always argued that the SEC and Ripple Labs, like the other defendants in the lawsuit, are in no position to represent the XRP holders he has been representing, he has also argued that the regulatory agency was wrong to take the San Francisco-based firm to court.
In his recent Twitter thread on “What is the LAW” the managing partners of Deaton Legal Firm cited the observations of Judge Castel in the Telegram case again to argue that the SEC case of Garlinghouse and Larsen, Ripple Labs and its managers, was faulty at some stage.
All this is conjecture at the end of the day, with no party sure what the court is going to do. However, according to Deaton, if the court follows the precedent, the pendulum swings in the path of the defendant.