SEC is attempting to block XRP holders from aiding Ripple’s defense and prohibit attorney John E. Deaton from further participating in proceedings.
SEC objects to XRP holders aiding Ripple defense
In its official objection, the regulator opposed the decision to recognize 1,746 XRP holders as “amici curiae” along with attorney John E. Deaton. Amici (plural: amici curiae) means “friend of the court” — an individual or organization not a party to a legal case but is permitted to assist a court by providing information, expertise, or insights. In this case, in support of Ripple’s defense.
Deaton has 3,252 affidavits signed by the token holders, essentially stating that they are victims of the SEC’s lawsuit against Ripple due to lost profits. Holders claim in the affidavits that they either did not assume legal responsibility for purchasing XRP, bought the tokens for utilitarian purposes instead of investment purposes, or did not buy based on promises made by the company and its representatives.
However, in its objection to XRP holders, the commission claimed that they are attempting to operate outside of strictly legal issues. “Movants do not propose briefing on legal issues. Instead, they wish to present arguments based on 3,252 affidavits ‘attesting’ to certain facts”, the SEC stated.
The commission has cited alleged threats by Deaton against former SEC Chairman Jay Clayton as reasoning to dismiss him as amicus. The SEC included a redacted letter dated June 7 to Judge Torres that cites a YouTube video from 2021 in which Deaton stated he “might have to walk over and slap the [profanity] out of former SEC Chair Jay Clayton.”
The XRP holders and Deaton as amici must submit a public reply to the SEC’s objection by July 25. Meanwhile, Deaton has claimed that the SEC has been inconsistent with its application of the law against Ripple, Garlinghouse, and Larsen. In a Tuesday thread on Twitter, the lawyer explained that if the SEC truly thought XRP was a security, it would have filed an injunction against Ripple and issued a cease and desist order against the two executives and Jed McCaleb from selling their tokens.
Yet, the co-founder, @JedMcCaleb, earned $2.56B from sales of #XRP SINCE THE DATE THE LAWSUIT WAS FILED!
That is nearly DOUBLE the amount the SEC seeks from the Defendants that were sued. It should be noted, Ripple has also sold #XRP since the lawsuit was filed as well.
— John E Deaton (207K Followers Beware Imposters) (@JohnEDeaton1) July 18, 2022
Ripple cofounder Jed McCaleb has sold nine billion XRP since leaving the company in 2014. The outcome of this case could determine whether XRP is a security. If the judge rules in favor of the SEC, it could be the precedent the commission needs to pursue legal action against other crypto projects that sold tokens similarly to Ripple.
Read more:
- The SEC Has Asked The Court To Bar XRP Holders From Participating In The Case
- XRP Worth $40 Million Gets Turned Over On Bitstamp In Matter Of Minutes