Ripple’s Latest Filing Sends Shockwaves: Deaton Weighs in on Potential Effects

On Mar 21, 2023

Well-known crypto attorney John E. Deaton analyzed Ripple’s latest filing in its ongoing legal battle with the United States Securities and Exchange Commission (SEC) and shed light on the potential impact of the blockchain payments company’s actions.

I’m hoping Judge Torres was already very aware of the ruling by Judge Wiles of the U.S. Bankruptcy Court for the Southern District of New York (same District as Judge Torres) in the Voyager Bankruptcy. @Ripple offers the ruling in further support of its fair notice defense. https://t.co/31r8ng11GS
— John E Deaton (@JohnEDeaton1) March 20, 2023

Ripple’s Latest Filing and Fair Notice Defense

Ripple cites Judge Michael E. Wiles’ decision in the Voyager bankruptcy case to strengthen its fair notice defense. The ruling overruled the SEC’s objection to Binance.US’s acquisition of Voyager’s assets despite the regulator’s concerns that VGX could be an unregistered security offering and Binance.US an unregistered security exchange.

The judge criticized the SEC for failing to establish a metric to determine which cryptocurrencies constitute unregistered security offerings, adding more uncertainty to the market.

Deaton suggested that Judge Analisa Torres, who is presiding over Ripple’s case, could use Judge Wiles’ recent ruling to question the SEC’s inconsistent treatment of digital assets. Deaton also believes that the latest filing could make it less likely for the judge to rule in favor of the SEC’s charges against Ripple executives, Brad Garlinghouse and Chris Larsen.

Implications For The Industry

If Judge Torres shares the same opinion as Judge Wiles, the SEC’s regulatory authority could come under severe scrutiny. This would be positive news for Ripple and the wider crypto industry. Deaton argued that the SEC’s ambiguous position on the classification of cryptocurrencies as securities has exacerbated the market’s uncertainty.

Schwartz’s Criticism Of The SEC

David Schwartz, Ripple’s Chief Technology Officer, expressed his outrage at the SEC’s actions in a tweet, calling them outrageous in eight different ways. He highlighted the regulator’s failure to speak up earlier in the case and argued that the SEC was using vague and unsubstantiated arguments to prosecute parties for carrying out transactions as ordered by the court.