• The SEC is suing Ripple Labs for allegedly selling unregistered securities in the form of XRP.
• Crypto lawyer John Deaton has criticized the SEC’s lawsuit, saying that it is too far-fetched and stretches beyond space and time.
• Deaton argues that Ripple has been fulfilling financial settlements for years and that the SEC’s argument regarding XRP sales is not justified.
Crypto Lawyer Blasts SEC’s Ripple Lawsuit
The Securities and Exchange Commission (SEC) recently launched an aggressive lawsuit against Ripple Labs for allegedly selling unregistered securities in the form of XRP tokens. But, one crypto lawyer and owner of the Deaton Law Firm, John Deaton, believes that this suit does not hold up to legal scrutiny. In a tweetstorm on May 4th, he described the merits of the suit as “cosmically far-fetched”.
SEC’s Legal Argument Is Unjustified
Deaton argued that Ripple has been fulfilling financial settlements for transactions long before this case began, so he was baffled by how the SEC interpreted every sale of XRP tokens as an ICO sale. He claims that this interpretation is „so far-fetched“ and goes „beyond space and time“. Furthermore, he argued that there was no legal authority or precedent to back up their argument regarding XRP sales.
Ripple Spends $200 Million on Legal Fees
In light of this lawsuit, Ripple CEO Brad Garlinghouse revealed Monday that they will have to shell out around $200 million on legal fees in order to defend themselves against this SEC suit. This will be a huge undertaking for a company like Ripple who are already dealing with other challenges in addition to this lawsuit from the US regulator.
Deaton Calls Out Double Standards Of Regulators
Denton noted how regulators have acted differently when pursuing similar cases with Coinbase or Telegram where their enforcement actions were much less severe than what we are currently seeing with Ripple labs – suggesting double standards from US regulators when it comes to crypto companies operating within the country’s jurisdiction.
Overall, while there are many arguments being made both supporting and opposing aspects of this case – it remains uncertain what final outcome will be reached between both parties involved in this situation as it drags on further into 2021.