Crypto lawyer explains why Ripple – SEC lawsuit is “ground zero”
CryptoLaw founder John Deaton thinks the verdict in the ongoing Ripple litigation will have a wider impact than initially anticipated because the motions for summary judgment have now been fully briefed and the judge’s decision is anticipated.
Ripple: Crypto Lawyer Gives Three Scenarios for Lawsuit Outcome and Potential Impact
But Judge Torres’ decision will have a HUGE impact practically and politically speaking. For ex, if the Judge agrees 💯 w/the SEC, @GaryGensler’s Regulation by Enforcement campaign will gain credibility and momentum. To Crypto outsiders, he won’t look like he’s out of line.
— John E Deaton (@JohnEDeaton1) December 5, 2022
As a result of the court’s finding that the cryptocurrency startup sold unregistered securities in the form of LBRY tokens, Ripple Ally LBRY.com lost its lawsuit against the SEC last month. Following this, there have been numerous discussions over whether the LBRY decision made by an appellate court held more weight than the Ripple decision made by a district judge.
Deaton offers three situations, each with broad repercussions. First, Gary Gensler’s “Regulation by Enforcement” campaign will gain support and momentum if the judge completely sides with the SEC. Second, Gary Gensler’s campaign for SEC chairman could come to an abrupt end if Ripple wins the case outright and the judge slams the SEC for pursuing its absurd notion that tokens are securities regardless of who sells them or where they are sold.
Thirdly, he imagines a situation in which Judge Torres splits the infant and decides that Ripple “provided” an unregistered security at some time. However, neither the XRP cryptocurrency itself nor secondary market sales are independent of Ripple.
He asserts that the Ripple case is “ground zero” and will set an important precedent regardless of what occurs. Following the FTX crash, the major media outlets have emphasized that how much of Gensler’s agenda is finally completed may depend on the outcome of the Ripple case, which the SEC filed in December 2020.
Congress, where numerous laws relating to cryptocurrencies were introduced this year, will also pay attention to the conclusion. Gary Gensler has opted for regulation by enforcement, which has resulted in more than 100 lawsuits being filed and several cryptocurrency companies being fined for securities violations during his tenure as SEC chairman, with some of the penalties reaching $100 million. Gensler bases his argument that most cryptocurrencies are securities on the 1946 Howey Test.
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