In a recent turn of events, the Ripple-SEC lawsuit has taken another interesting twist. John Deaton, the founder of CryptoLaw and attorney representing XRP holders, has come forward to criticize the Securities and Exchange Commission's (SEC) logic regarding XRP secondary sales. With a cheeky tone and a clear grasp of the subject matter, Deaton took to Twitter to express his thoughts on the matter.
Deaton shared a screenshot of a portion of the SEC's argument that emphasized their position on XRP secondary sales. According to the SEC, "the XRP traded, even in the secondary market, is the embodiment of those facts, circumstances, promises, and expectations, and today represents the investment contract." In response, Deaton challenged the SEC to provide just one example in which it had been determined that an investment contract existed without privity or contact between buyer, seller, or promoter. He pointed out that the SEC failed to support its claim, leaving its theory on secondary market sales unsupported.
Taking a playful jab at the SEC, Deaton remarked that when considering all the laws at hand, the SEC seems to have nothing to back its argument that secondary market sales should be considered securities. He acknowledged that some may argue that the SEC has the right to pursue novel theories unsupported by the law. However, Deaton disagreed with this viewpoint. He asserted that the SEC already possesses the authority provided by Congress and existing laws. Therefore, if the SEC is attempting to push forward with novel, unsupported theories, the application of the Fair Notice Defense becomes necessary.
Deaton's statement raises an interesting question about the SEC's approach to the Ripple-SEC case. He believes that the judge presiding over the lawsuit is likely to address the issue of secondary market sales, contrary to the opinions of some who speculate otherwise. Deaton's optimism is not unfounded, as the judge might be well aware of the precedent set by the LBRY v. SEC case.
By mentioning the LBRY v. SEC case, Deaton subtly alludes to the potential influence it could have on the Ripple-SEC lawsuit. In the LBRY case, the court ruled in favor of the defendants, asserting that the SEC had overstepped its bounds by claiming that the LBRY tokens were securities. This ruling could potentially serve as a precedent in the Ripple-SEC case, providing further support for Deaton's argument against the SEC's stance on XRP secondary sales.
As the Ripple-SEC lawsuit unfolds, the involvement of figures like John Deaton adds another layer of intrigue. His critique of the SEC's theory on XRP secondary sales showcases the complexities and differing perspectives within the crypto and legal communities. It remains to be seen how the judge will weigh the arguments presented by both sides and whether they will consider the LBRY case as a relevant precedent. Until then, the crypto world eagerly awaits the resolution of this high-stakes legal battle.
Disclaimer: The information provided in this article is for informational purposes only and should not be considered as legal or investment advice. It is always advisable to consult with a qualified professional before making any financial decisions.
