SEC vs. Ripple: Deaton’s Unbiased Analysis of the Lawsuit

John Deaton

John Deaton discussed his view on the ongoing legal battle between the SEC vs. Ripple on his tv show #CryptolawTv which he hosted at exactly 3 pm ET yesterday. The show titled “SEC vs. Ripple: How Will Deaton Decide The Case” reviewed what to expect from the case if Deaton was the judge.

The discussion was for Deaton to provide a fair analysis of the legal situation and the different possible outcomes that Judge Torres could consider and share his opinion without bias on how he would rule if he were to be the judge. 

He stated in the discussion that if the case was about enforcing United State security laws, it would have never been filled, and Ripple would have settled the case before their original settlement timeframe. He further noted that Ripple had agreed to settle the case. Deaton was expected to give his unbiased review on what would be an unbiased analysis of the U.S. securities, like in the Ripple case. 

The settlement would have been settled yesterday if the SEC had agreed to the ongoing future secondary market. In his explanation of what a fear notice is, he noted that its use in the cases like Library case and the Telegram case, which included a lack of notice arguments which all failed. 

Read article: Ripple vs. SEC: Delayed Ruling May Affect XRP Price. Here’s How

His opinion on distinguishing Ripple’s notice defense from the concept of selective enforcement. However, Deaton noted in his remarks that he personally believed that security attorney were quick to dismiss Ripple’s notice defense thst was offered in the case. In ripple’s defense, he believes that the term investment contract was vague when it comes to applying it to blockchain technology. 

Furthermore, he claimed the failed Howe’s test should have failed as it did. The argument that crypto entrepreneurs should know what is prohibited and what isn’t was tried several times, but all failed. 

“Ripple’s fear notice defense is very specific to XRP and very specific to the way agencies in the government including SEC, especially the SEC treated XRP” he noted

A fear notice can only kick in if the judge finds out that at some point in time at the beginning until today, sold XRP or offered it as an investment contract.

As far back as 2013, when Ripple was created, the then CEO Chris Larsen had several meetings with the Federal Reserves, SEC, CFTC, and Department of Justice, where he introduced to them the virtual currency, which will be utilized in a decentralized protocol.

Related also: Hogan Suggests SEC Will Not Fight Ripple Victory

However, he noted that Coinbase sought the SEC’S guidance before listing XRP, which wasn’t classified as a security. In 2019, the SEC offered their digital assets framework for determining wether digital assets were secure.  The digital assets framework stated, “a virtual currency is unlikely to meet Howe’s test if it can be immediately used to make payments in a variety of contexts or act as a substitute for real fiat currency.”

He further accused the SEC of absurdity in the current lawsuit against Ripple. 

2019: Financial Stability Oversight Council Report Summary

The report includes all the US treasury from all financial institutions worldwide. XRP, Bitcoin, Ethereum, and Litecoin were all highlighted as not security bus virtual currency that has however increased in market share. This document was signed by the SEC treasurer, and CTFC chairman.

Deaton’s Final Conclusion

The Cryptolaw founder noted that he believes the SEC will lose its outright summary judgment, and if the judge finds out that Ripple offered XRP as a security at some point, it will go to a jury for fair notice defense. However, in his opinion, if the SEC wins, it will go to a jury. Ripple could win outright on a different basis.

Before Deaton’s live discussion, XRP traded at $0.5222 with a $1.23B market valuation in 24 hours. The price of XRP has then declined by -3.6%. 

As of the time of writing, XRP is trading at $0.503 a decline of 3.5% in the last 24 hours.

Disclaimer: The information in this article should not be considered financial advice, and FXCryptoNews articles are intended only to provide educational and general information. Please consult with a financial advisor before making any investment decisions.

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