SEC objects to XRP holders aiding Ripple defense

SEC objects to XRP holders aiding Ripple defense

The Securities and Exchange Commission (SEC), is trying to stop XRP holders aiding Ripple’s defense and bar John E. Deaton any further participation in proceedings.

The regulator submitted an official objection on July 19 and opposed the decision to accept 1,746 holders of XRP as “amici curae” with John E. Deaton.

“Friend of the Court” is plural for amici (plural: Amici Curiae). It refers to an individual or organisation that is not a party in a legal proceeding but can assist a court with information, expertise or insight. In this instance, Ripple is being supported.

Deaton has 3252 affidavits from token holders, essentially declaring that they are victims in the SEC’s lawsuit against Ripple due to lost profits.

In the affidavits, holders claim that they didn’t assume legal responsibility for purchasing XRP tokens, that they bought them for investment purposes and not for their personal use, or that they didn’t buy based upon promises made by the company.

The commission argued that XRP holders were trying to operate beyond the legal boundaries in their objection. The SEC wrote:

“Movants don’t propose briefing on legal questions. They want to present arguments that are based on 3252 affidavits “attesting to” certain facts.

As a reason to fire Jay Clayton, the commission cited Deaton’s threats against Jay Clayton, former Chairman of SEC. A redacted letter sent to Judge Torres on June 7, was included by the SEC. It cites a YouTube clip from 2021 in that Deaton claimed he might have to “walk over and slap [profanity] out former SEC Chair Jay Clayton.”

Deaton and XRP holders are to respond to the SEC’s objection in writing by July 25.

Ripple, a blockchain company, issues the XRP token. In a case that began in 2020, the SEC alleges that Ripple and Christian Larsen, its executives, sold XRP to unregistered securities.

Deaton questions SEC’s treatment McCaleb

Deaton claims that the SEC has not applied the law correctly to Ripple, Garlinghouse and Larsen. The lawyer said that if the SEC really believed XRP to be a security, it would have issued an injunction against Ripple as well as a cease-and-desist order against Jed McCaleb and the two executives.

Jed McCaleb, cofounder of Ripple, has sold nine billion XRP in the last year since he left the company.

SEC claims that #XRP is a security, and anyone selling it is in violation of Section 5 of Securities Act. @Ripple @bgarlinghouse and @chrislarsensf are alleged to have “enriched” themselves at investors’ expense. The SEC is seeking $1.3B disgorgement from these defendants. https://t.co/9nJ1iNroth
John E Deaton (207K Followingers Beware of Imposters) (@JohnEDeaton1) July 18, 20,22

This case could decide whether XRP can be considered a security. If the judge rules in favor the SEC, this could set the precedent that the commission will use to sue other crypto projects for selling tokens similar to Ripple.

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