As the SEC vs. Ripple lawsuit reaches its final stages, legal experts focused on the cryptocurrency market continue to provide insights into the potential outcome of the case. In a recent development, attorney John Deaton, the founder of CryptoLaw, took to Twitter to speculate on an important aspect that Judge Analisa Torres may address in her upcoming summary judgment decision regarding XRP secondary market trading.
Attorney Deaton’s remarks were prompted by a statement by Marc Fagel, former SEC regional director, who suggested that Judge Torres might not address XRP secondary market trading. Disagreeing with Fagel, Deaton, who represents thousands of XRP investors as amici curiae counsel in the Ripple lawsuit, emphasized that the contents of Judge Torres’ upcoming summary judgment decision remain uncertain.
Deaton acknowledged that determining whether Ripple sold XRP as an investment contract does not necessarily require addressing secondary market sales. However, the judge could rule on more minor issues without delving into market transactions. Nevertheless, in her forthcoming ruling, Deaton expressed confidence in Judge Torres’ intention to address XRP secondary market trading.
Deaton Raises Concerns Over Ripple Secondary Market Trading
To support his belief, Attorney Deaton presented three key reasons. Firstly, he pointed out that the SEC’s summary judgment motion necessitates addressing the secondary market trading of XRP. According to Deaton, the SEC argued in its brief for summary judgment that purchasing XRP constituted an investment in a joint enterprise involving other investors and Ripple. The commission contends that even if XRP were recognized as legal tender by any country, such transactions would still be regarded as investment contracts. Deaton stressed that XRP serves as the link between all XRP investors and Ripple.
Additionally, Deaton highlighted that the SEC’s argument extends beyond Ripple’s sales, encompassing secondary market sales of the digital asset. Given these factors, Deaton firmly believes Judge Torres would unlikely ignore discussions regarding XRP secondary sales and the token itself.
Secondly, Deaton asserts that the numerous amicus briefs filed in the lawsuit on behalf of XRP holders, including Coinbase, SpendTheBits, TapJets, Blockchain Association, and Chamber of Digital Commerce, should prompt Judge Torres to address the secondary market sales of the cryptocurrency. Notably, failure to address this aspect would suggest that the judge remains silent, despite the weight of the amicus curiae briefs.
Lastly, Deaton contends that Judge Torres is aware of the discussions surrounding secondary market trading as it was raised in the penalty phase of the SEC vs. LBRY lawsuit. Deaton, who represented tech journalist Naomi Brockwell in the LBRY case, indicated that if the judge neglects to address XRP secondary market sales and Ripple faces an unfavorable outcome at the summary judgment, he would file a motion to participate in the penalty phase of the Ripple lawsuit.
Related Reading: | Ripple Resilience: XRP Holds Strong At $0.50 Amidst Regulatory Storm