Deaton Explains Potential Effects of Ripple’s Latest Filing in SEC Case

The filing cites a recent ruling in the Voyager bankruptcy case. 

Attorney John E. Deaton has given insight into the potential impacts of Ripple’s latest filing in its extended legal battle with the United States Securities and Exchange Commission (SEC).

Recall that, as reported today, the blockchain payments firm has filed a second letter of notice of supplemental authority supporting its fair notice defense. The filing disclosed by Attorney James K. Filan, who has followed the case closely in a tweet yesterday, cites a recent ruling in the Voyager bankruptcy case.

In the ruling, Judge Michael E. Wiles’ overruled the SEC’s objection to Binance.US’s acquisition of Voyager’s assets over ongoing speculation within the agency that VGX could be an unregistered security offering and Binance.US an unregistered security exchange. The judge made this decision bashing the SEC for failing to come up with a metric to decide which cryptocurrencies constitute unregistered security offerings and fueling uncertainty in the nascent market. 

Commenting on the filing in a Twitter thread yesterday, Deaton asserted that Judge Analisa Torres could cite the recent ruling from her colleague in the Southern District of New York (SDNY) in a criticism of the SEC’s actions and perceived inconsistent treatment of digital assets. Recall that days ago, citing the same ruling, the CryptoLaw founder had asserted that judges would be forced to call out the commission for its perceived lack of allegiance to the law, overreach, and inconsistent statements.

Furthermore, the attorney asserts that it is now more unlikely that the judge would rule in favor of the SEC in its charges against Ripple executives. Recall that the regulator had named and accused Brad Garlinghouse and Chris Larsen of aiding and abetting unregistered security sales in its complaint. 

As previously reported, Deaton had labeled this move as a blunder on the part of the market regulator. Citing the latest filing, Deaton says it would be unlikely that Judge Torres would find the executives guilty if the SEC itself did not know that XRP was an unregistered security.

I predicted over a year ago that Judge Torres will rule in favor of @bgarlinghouse and @chrislarsensf. I believe Judge Torres will rule that no reasonable jury could conclude that the two executives were reckless in not knowing #XRP was a security when the SEC itself didn’t. ? https://t.co/BG2ByllHRI

— John E Deaton (@JohnEDeaton1) March 20, 2023

The XRP community continues to anticipate Judge Torres’ ruling on summary judgment motions in the over two-year-long legal battle Deaton has asserted would be the only clarity the nascent market gets in the next two years. Pundits now say the ruling could come before the end of April.