The SEC v. Ripple lawsuit has witnessed a dramatic twist with John E. Deaton, a prominent supporter of XRP and Ripple, launching a scathing attack against former SEC Chair Jay Clayton.
Deaton’s criticism revolves around Clayton’s recent comments regarding the court’s ruling on Ripple’s programmatic sales of XRP.
Read Also: John Deaton On Ripple Victory: XRP is a Utility Token At Its Core
In an already deleted tweet posted by Digitalassetbuy, Clayton questioned the court’s decision on XRP’s programmatic sales, drawing comparisons to other lawsuits involving secondary trading.
Clayton said, “The judge, I believe, found issue its in the initial issuance was, in fact, a securities transaction during the capital raising phase. The question in the Ripple case that I believe the SEC did not win was on the secondary trading. Was that a securities transaction or not? There are other cases with similar facts for the SEC has won that. We will see how that plays out.”
Oh how I would love to be on a panel discussion with Clayton. First of all, he’s misrepresenting the truth – as usual. There are no other cases with similar facts that found otherwise at summary judgment. Period. The judge in LBRY said his decision didn’t apply to secondary… https://t.co/TtBJ7j9WvQ
— John E Deaton (@JohnEDeaton1) December 9, 2023
However, Deaton vehemently disagrees with this comparison, accusing Clayton of distorting the facts. He meticulously dissects Clayton’s argument, highlighting key distinctions between the Ripple case and the cases cited by the former SEC Chair.
He emphasizes that the Terraform and LBRY lawsuits were decided at the motion to dismiss stage, where the court assumed all allegations in the complaint were true.
John Deaton noted:
“The judge in LBRY said his decision didn’t apply to secondary sales. I know because I was the one in Court who the judge was talking to when he said it. In fact, in the Ripple decision, Judge Torres cited to the very page in the Transcript of the January 30, 2023 hearing, where the judge in LBRY told me his decision didn’t apply to secondary transaction.”
In contrast, the Ripple case reached the summary judgment stage, where all evidence was presented and considered before the court’s final ruling.
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Deaton further criticizes Clayton for failing to acknowledge these crucial differences, accusing him of intentionally misleading the public. He argues that Clayton’s attempt to draw parallels between the cases is disingenuous and undermines the legitimacy of the court’s decision in the Ripple case.
A victory for Ripple could establish a precedent that protects digital assets from excessive SEC regulation. Conversely, a defeat for Ripple could have significant repercussions for the future of crypto innovation.
A Broader Debate
Deaton’s attack on Clayton transcends the confines of the courtroom, sparking a broader debate about the regulatory landscape surrounding cryptocurrencies. His stance reflects the growing sentiment within the crypto community that the SEC’s current approach to digital assets stifles innovation and restricts progress.
Whether Deaton’s criticism will trigger a reevaluation of the SEC’s regulatory framework remains uncertain. However, one thing is certain: his voice has amplified the concerns of the crypto community and ignited a critical dialogue about the future of digital assets.
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