Ripple lawsuit: Court sides with XRP Holders after brutal take down

The court in the SEC v. Ripple lawsuit has denied the SEC’s request to revoke the amici status of XRP Holders and bar John Deaton from the case altogether.

XRP holders won’t be able to participate in the expert challenge but will be allowed to apply to brief concerns with SEC’s expert at summary judgment.

The Securities and Exchange Commission wanted John Deaton to be barred from making additional filings or otherwise participating in the SEC v. Ripple case.

The letter filed by the SEC – opposing an XRP Holders’ motion to file an amicus brief – exposes attorney John Deaton’s behavior online as an argument in favor of barring him from making additional filings or otherwise participating in the case.

According to the plaintiff, John Deaton and his team have mischaracterized the SEC’s claims.

“Movants mischaracterize the SEC’s claims as claims against XRP holders in the secondary market. But while Securities Act Section 5 requires Ripple, as the issuer of XRP, to register its offers and sales for the benefit of actual or potential investors, Section 4 could exempt investors in the market from registration. The SEC’s claims are for Ripple’s offerings, and those by its affiliate, not purchases and sales by investors in the market.”

The plaintiff added it may seek further relief from the court in light of Deaton’s and his followers’ recent conduct.

“Unprecedented is a gross understatement when describing this case. Because of the SEC’s sweeping allegations that XRP itself is a security, almost immediately this case was dubbed: The Cryptocurrency Trial of the Century”, the amici letter started out, in reference to Roslyn Layton’s article published by Forbes. “If this Court were to adopt the SEC’s theory regarding XRP, it would dramatically change the regulatory landscape for the entire cryptocurrency industry.”

The amici reply offered many arguments in favor of retaining the status and concludes that “since the SEC cannot attack amici’s message, it attacks amici’s messenger”: John Deaton.

In regard to the XRP community’s behavior online, John Deaton stated: ” While I cannot control people on social media, I have made every effort to promote and respect the judicial process. Considering the public outcry related to this case, my presence has likely minimized disruptions from the public. I have cautioned against recording Court proceedings; to never contact the Court, witnesses, the parties or their attorneys; and cautioned against calling into hearings before the scheduled time.”

Jeremy Hogan, an XRP-friendly attorney based in Orlando-Florida, took to Twitter to comment on the ruling: “Once again, an SEC gambit fails. Not only will Deaton likely be allowed to brief the expert witness issue (just not right now) and NOT be kicked out of the case as the SEC had hoped, but by attacking Deaton personally, the SEC opened the door to the filing of SEC dirty laundry.”

John Deaton reached the XRP community to praise the Judges in the SEC v. Ripple case: “The XRP community needs to continue to appreciate and respect the two judges assigned to this case. Judge Netburn has been neutral and fair to both sides during discovery. Judge Torres’ decision is extremely fair and just (even though she technically denied my immediate motion).