On Wednesday (July 20), American lawyer John Deaton (@JohnEDeaton1 on Twitter), the owner of the Deaton Law Firm (which is based in East Providence, Rhode Island), who has been closely following and commentating on the SEC’s lawsuit against Ripple, explained to Fox Business why the SEC is angry with him.
Deaton is also the founder of the website CryptoLaw, which “was launched in 2021 to be a clearinghouse of information, news and analysis on key U.S. legal and regulatory developments for digital asset holders”, as well as the host of the YouTube channel CryptoLaw.
As you may remember, on 22 December 2020, the SEC announced that it had “filed an action against Ripple Labs Inc. and two of its executives, who are also significant security holders, alleging that they raised over $1.3 billion through an unregistered, ongoing digital asset securities offering.” Essentially, the SEC is arguing that XRP is a security under U.S. federal securities laws.
On Tuesday (July 19), the New York Regional Office of the SEC filed a letter (dated June 7) addressed to U.S. District Judge Hon. Analisa Torres, in which the SEC said it “opposes six XRP investors’… motion to file an amicus brief regarding the opinions of one of the SEC’s experts.” The SEC went on to say that the U.S. District Court for the Southern District of New York should deny this motion and “prohibit Deaton from any further participation in these proceedings.”
Gasparino wanted to know why the SEC is so upset with Deaton.
“It’s crazy times… I made a YouTube video where I did a satirical mock cross examination of former chairman Clayton, and I infused scenes from [the movie] “My Cousin Vinny“.
“And I tweeted a few things that were harsh criticism, and they told the judge that I shouldn’t be granted amicus status because of that. She rejected those views, granted me amicus status and, lo and behold, now they’re arguing that I should be thrown off the case.“
Later in the conversation, Gasparino said that the SEC is “losing the case,” and asked Deaton what is the next step.
“Next month is due for summary judgements. That’s where each side tries to get a complete victory. The judge decides one way or the other, or she might decide that a jury has to issue certain factors, but you’re right Charlie. A lot is at stake because the SEC has come out and argued that the token itself — not just the way Ripple sells it — but that if anyone in the United States sells XRP, they’re violating section five. So, if the SEC were to get its way and deem XRP a security, the token itself, then every altcoin on the market including Ethereum would be in play for the SEC to get their hands on.“
The interview ended with Deaton saying that he had until Monday (July 25) to give his response to the SEC and that “hopefully, the judge within a week will give a decision.”