The pro-XRP lawyer maintains that the courts will be the only source of clarity for the crypto space for the next two years.
Attorney John E. Deaton has claimed that the United States Securities and Exchange Commission (SEC) case against Ripple could make it to the U.S. Supreme Court before Congress creates a regulatory framework for the crypto industry.
For context, the case is in the district court and would need to reach the circuit court of appeal before it can reach the Supreme Court.
The CryptoLaw founder expressed this view in a tweet today. It came in response to indications that the SEC had no plans to put the brakes on its accelerated crypto enforcement efforts.
Eleanor Terrett, a FOX Business journalist, shared an excerpt of the SEC’s latest budget proposal. Notably, the agency emphasizes that it will not hesitate to investigate and launch enforcement actions against crypto firms it deems non-compliant. According to Terrett, this indicates the regulator would expand its crypto enforcement unit, which doubled in size in the past year.
Citing Terrett’s findings, Deaton reiterates that the only clarity crypto will get from the next two years will come from the courts. While he notes that it is not ideal, he maintains that it is the present reality.
“Hell, the Ripple case could be heard by the Supreme Court before Congress acts,” Deaton tweeted. “We must fight in the Courts.”
I’ve said for 2 years: Clarity comes from the Courts – not Congress – and not the SEC. It’s not the way it should be but it’s the way it is and the way it’s going to be. Hell, the Ripple case could be heard by the Supreme Court before Congress acts. We must fight in the Courts. https://t.co/9KZxhI7IFN
— John E Deaton (@JohnEDeaton1) March 14, 2023
In January, Deaton asserted that the highly anticipated ruling in the Ripple case over whether XRP is an unregistered security is the only clarity the nascent market would get in the next two years. The lawyer made this argument by citing the polarization of Congress and the sour taste the FTX collapse has left in the mouths of lawmakers.
Yesterday, the attorney representing thousands of XRP holders as a friend of the court in the SEC case against Ripple asserted that Judge Analisa Torres’ impending ruling becomes “more significant” with the passing of each day. However, he expressed faith that there is “no way” that the federal judge would find that secondary market sales of XRP constitute unregistered securities. According to Deaton, there is no precedent, and Judge Torres is a stickler for following the law.
“No way the Judge adopts the SEC’s unconstitutional theory that the asset itself is always an investment contract,” Deaton tweeted. “There isn’t a case in 80 years since Howey that makes such a finding. Judge Torres religiously follows the law. She won’t conclude secondary sales violate Section 5.”
As previously reported, Deaton believes the only victory the SEC can get in its case against Ripple is that the blockchain payments firm sold XRP as a security from 2013 to 2017.
Last week, Judge Torres released her ruling on Daubert motions seeking to preclude expert testimony. It was widely viewed as a Ripple victory, with Ripple General Counsel Stuart Alderoty asserting that the firm grows more confident with each ruling.
Deaton has predicted that the judge’s ruling on summary judgment would come soon.