More twists and turns are being recorded in the high-profile case between Ripple and the Securities Exchange Commission (SEC), with the regulator increasingly being faulted for its stand in the matter.
In the latest update, pro Ripple lawyer John Deaton has once again blasted the SEC’s arguments terming them ‘stupidly outrageous.’
In a tweet on February 19, Deaton slammed the regulatory agency’s assertion that anyone who acquires XRP in Japan is part of a common enterprise with Ripple and all other XRP holders and that the token is a security. This is despite Japan’s regulator, the Financial Services Agency, stating that XRP is not a security.
The SEC’s claims are so stupidly outrageous that it argues a person who acquires #XRP in Japan is in a common enterprise w/@Ripple “and all other #XRP holders” and #XRP is a security - even though Japan’s own regulator says its not. #XRP is the 2nd most popular crypto in Japan. https://t.co/jrEHVfnpsB— John E Deaton (@JohnEDeaton1) February 19, 2023
At the same time, Deaton also stated that if the SEC were only pursuing Ripple’s sales, he would have never filed suit against it.
It is worth noting that Deaton had previously stated that the only win the SEC will likely get in its case against Ripple is that the firm sold XRP as a security from 2013 to 2017. As a reminder, the SEC is suing Ripple for the sale of unregistered securities in the form of XRP tokens.
Questions on SEC’s authority
Elsewhere, Ripple’s Chief Legal Officer Stuart Alderoty, in a tweet on February 19, insinuated that the SEC might be overstepping its mandate.
According to the officer, observing the rule of law is necessary to prevent government agencies from overstepping their legal authority and becoming autocratic.
“To the extent that the mere will of an agency official or an agency itself is permitted to exceed the authority granted by law, the government becomes an autocracy. Against this threat of “officialdom unchained” the “courts have always been vigilant.” Jones v. SEC (1936),” he said.
Unsealing Hinman speech documents
As the crypto community awaits confirmation on the final judgment date, the lawsuit is witnessing renewed attention around unsealing certain documents. In particular, a senior contributor to Forbes, Roslyn Layton, filed a motion to gain access to the Hinman speech documents.
Notably, the Hinman speech, given by the former Director of the SEC’s Division of Corporation Finance in June 2018, is an important document in the Ripple case as it is believed to contain the regulator’s position on how cryptocurrencies are classified as securities. Ripple’s legal team has been seeking to obtain the documents for review, as they believe that the inferences made in the speech about Bitcoin (BTC) and Ethereum (ETH) could also apply to XRP.
As SEC fights to keep the document from the public, Deaton had initially pointed out that they will eventually be unsealed ahead of the speculated March summary judgment.
With the legal battle dragging on for the third year, investors are focusing on the ruling’s overall implication on the crypto sector. Indeed, XRP has emerged among the assets to watch since the token has previously traded in tandem with the case’s critical decisions.
XRP price analysis
By press time, XRP was trading at $0.39 with daily losses of about 0.2%. On the weekly chart, the token is up 5%.
On the other hand, XRP’s market cap stands at $19.84 billion.