Attorney John Deaton has made another prediction about the ongoing lawsuit between Ripple and the Securities and Exchange Commission (SEC).
In a tweet today, attorney Deaton described the SEC’s claim regarding what constitutes a common enterprise in the case as a “schizophrenic argument” – a mental disorder causing the regulator to interpret reality abnormally.
According to Deaton, there is a likelihood that Judge Analisa Torres could deny both the SEC and Ripple’s summary judgment motions due to the regulator’s “schizophrenic argument” regarding the second prong of the Howey test (common enterprise).
If this happens, Deaton asserts that the lawsuit’s presiding judge could rule that “there is a genuine issue of material facts as to the existence of a common enterprise.”
Based on the SEC’s schizophrenic argument regarding what constitutes the common enterprise in the @Ripple case, there’s a possibility Judge Torres could deny summary judgment and rule that there is a genuine issue of material facts as to the existence of a common enterprise. https://t.co/3Vo9wGFRed
— John E Deaton (@JohnEDeaton1) January 30, 2023
Deaton Slams the SEC’s Common Enterprise Argument
Attorney Deaton’s recent assumption comes less than two weeks after he first stated the likelihood of Judge Torres denying the summary judgment motions of Ripple and the SEC.
“What some people have failed to consider is that Judge Torres could say denied to both summary judgment motions, and it goes to a jury,” Deaton noted in a Twitter thread.
He added that it is becoming difficult to predict events in the lawsuit since he is yet to read the underlying evidence relied upon and all Rule 56.1 facts.
Attorney Deaton has publicly slammed the SEC’s unstable argument regarding what constitutes a common enterprise in the Ripple case. The Crypto Law founder said the SEC was “all over the place” with the common enterprise argument.
Per Deaton, the SEC first labeled Ripple as a common enterprise, Deaton said. However, the regulator changed its argument after one of its experts testified that the common enterprise in the case includes the entire XRP ecosystem, including investors and crypto trading platforms.
Following opposition from Ripple and the XRP community, Deaton said the SEC abandoned the expert’s testimony. He added:
“Instead, the SEC argued XRP represents the common enterprise while also arguing XRP represents all of the promises and efforts made by Ripple.”
Furthermore, Deaton says that the SEC would not be granted summary judgment in the way it presented its common enterprise argument.
This is why I’m confident the SEC is NOT granted summary judgment in the manner they have requested. It is also why I could see the judge saying denied and arguing the jury must decide certain issues (eg non-investment uses of #XRP, recklessness, fair notice, etc).
— John E Deaton (@JohnEDeaton1) January 20, 2023