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John E Deaton

Not XRP, But Regulators Are Now After ETH- Ripple Lawyer

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John E. Deaton, an attorney, and XRP advocate claimed on Twitter that regulators have shifted their strategy and are now targeting Ethereum.

To justify his claims, Deaton cited the NYAG/KuCoin lawsuit where the former had accused the exchange of selling ETH as unregistered securities.

The founder of the CryptoLaw firm noted that NYAG’s decision to select ETH over XRP, despite the currency being listed on the exchange, for unclear reasons, was not accidental.

“They chose ETH and staking. It’s about going after ALL staking”, he retorted.

It is a coordinated long gameplay to get a default judgment and a potential ruling w/ language that KuCoin was selling ETH as an unregistered security. Why has the investigator purchased ETH specifically when there were hundreds of other tokens to choose from?

On 9 March, New York State Attorney General Letitia James filed suit against KuCoin alleging the Seychelles-based crypto exchange is violating securities laws by offering tokens – including ether – that meet the definition of security without registering with the attorney general’s office.

KuCoin did not respond to subpoenas filed by the NYAG’s office served via email and in person.

With her lawsuit, Attorney General James is seeking a court order to stop KuCoin from representing itself as an exchange, and prevent the company from operating in New York.

As a result, Deaton led a class action of over 1000 ETH holders against NYAG, TronWeekly reported.

In the class action complaint, the XRP proponent argued that Ethereum is not a security and has more than 1,000 supporters, 57 of whom are from New York.

XRP Lawyer Hinting Ripple/SEC Lawsuit To Drag On

Recently, Deaton and former SEC advisor J.W. Verret held a long discussion on topics like his latest class action suit against NYAG’s claim that Ethereum [ETH] is security.

He along with Verret also spoke on Ripple’s pursuing the case with the SEC to the Supreme court.

As per the XRP representative, until Congress establishes a legal framework for the cryptocurrency business, the Ripple case, which has been pending in the district court for some time, could make it to the U.S. Supreme Court.

While the case would first need to go to the circuit court of appeal before it can be taken to the Supreme Court, Deaton’s view highlights the potential for the case to drag on for some time.

XRP Lawyer and An Expert Discusses On SEC’s “Misjudgement”

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XRP representative John E Deaton and former SEC advisor J.W. Verret held a long discussion touching topics like his latest class action suit against NYAG’s claim that Ethereum [ETH] is security.

He along with Verret also spoke on Ripple’s pursuing the case with the SEC to the Supreme court.

As per Deaton, until Congress establishes a legal framework for the cryptocurrency business, the Ripple case, which has been pending in the district court for some time, could make it to the U.S. Supreme Court.

While the case would first need to go to the circuit court of appeal before it can be taken to the Supreme Court, Deaton’s view highlights the potential for the case to drag on for some time

The founder of CryptoLaw shared this view on Twitter, following United States’s Securities and Exchange Commission [SEC] renewed crypto enforcement efforts in the nation. 

Next, they delved into detail about why Ripple was targeted despite being one of the best-funded companies in the crypto industry.

Verret who is also a visiting professor at Stanford Law School believed that the XRP community should hope for a “thin victory” for Ripple against the U.S. Securities and Exchange Commission.

The assistant law professor at George Mason University expressed his opinions during a CryptoLaw live webcast, claiming that the regulator misjudged the struggle and likely anticipated a settlement.

This is a far-off prediction, he said, given the course of events.

XRP Representative’s Class Action Suit

With regard to Deaton’s class action suit, New York Attorney General Letitia James filed a lawsuit against the KuCoin cryptocurrency exchange for offering unregistered securities in the state late last week.

Today’s action is the latest in our efforts to rein in shadowy cryptocurrency companies and bring order to the industry. All New Yorkers and all companies operating in New York have to follow our state’s laws and regulations. KuCoin operated in New York without registration, and that is why we are taking strong action to hold them accountable and protect investors.

Deaton, the founder of crypto-law.us, asserted in a class action complaint that Ethereum is not a security and has more than 1,000 supporters, 57 of whom are from New York.

As the Fed provided a $25 billion rescue over the weekend, there is now greater concern about the breakdown of the banking system, which has probably promoted Deaton’s Ethereum to file a class action suit.

XRP Lawyer Predicts Summary Judgement Is Near

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XRP representative in the Ripple Vs SEC lawsuit, John E Deaton stated that the summary judgment could be anytime, as he sees no reason for further delay.

Attorney Deaton who is also the founder of a law firm and a prominent member of the XRP community is acting as an amicus [filed a motion to intervene as a “third-party defendant”] in the ongoing legal dispute that has gained tremendous limelight.

Judge Analisa Torres recently made an initial ruling to both SEC and Ripple which many assumed was the summary judgment, but it was not.

In fact, no side gained nor lost because the judge partially granted and partially denied “Daubert” motions, which are requests by both parties to have expert testimony excluded from summary judgment.

But, in another significant development, Torres approved Ripple’s motion to exclude testimony from a purported expert witness called by the SEC while rejecting the regulator’s request to withdraw John E. Deaton’s amicus status.

The above ruling is undoubtedly a big setback for the SEC’s efforts, as the top regulator so far had difficulty proving that buyers of XRP had a realistic expectation of profit.

Not long ago, Deaton shared a series of Twitter threads on his official page, where he claimed that the 12,600 XRP holders who joined the motion in 2021 have increased to more than 75K in 2023:

Technically, it was 12,600 XRPHolders who joined the motion to intervene [today the putative class is more than 75K]. But think about the motion to intervene:Thousands of retail digital asset holders asked a Federal Judge to make them actual defendants in a case!

XRP Lawyer Recalls The Past, Ripple’s Report

Notably, Deaton’s tweets came after YouTuber Richard Heart comments, who referred to the XRP case as an instance for filing an amicus brief or motion, where he said:

“Everyone is virtually attacked by bad precedent and everyone wants the best arguments heard. Win together”.

In response to the YouTuber, Deaton reflected on the backlash he received at the beginning for filing the “unlikely” motion when many people including several prominent lawyers called him “crazy”.

That being said, the outcome of the highly publicized lawsuit has the potential to drastically impact the token’s economics.

Not long ago, Ripple published its Q4 2022 Markets Report, revealing that it had processed $226.31 million in net XRP sales in that quarter alone.

XRP Investors’ Long Awaited Flare Token Distribution Has Arrived

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XRP holders who qualified for the December 2020 snapshot have finally hailed the highly anticipated Flare [FLR] token airdrop.

XRP representative John E Deaton called it a breath of fresh air amidst the SBF scandal and the legal tussle with the SEC.

Flare Network is a decentralized platform for smart contracts that utilized a new programming language called Flare and it is Ethereum Virtual Machine [EVM] compatible.

Within the Flare Network, the FLR coin serves as a medium of trade and a store of value. Additionally, it is used to award users for their contributions to the network, such as validating transactions.

Besides that, the Flare network and its FLR token, aim to essentially bring smart contract capabilities to various blockchain networks, starting with XRP and then Litecoin [LTC].

In addition to that, Flare stated that it will support XRP as a “first-class citizen” on its platform, meaning that the token can be used in the same way as the FLR token within the Flare Network.

This includes the capacity to be used as a medium of exchange and a repository of value, as well as in smart contracts and other dApps developed on the Flare Network.

According to prior statements made by the network’s team, each qualified holder would first receive 15% of the Spark tokens that are entitled to claim before continuing to claim an average of 3% per month for a minimum of 25 months and a maximum of 34 months.

FLR was planned distributed to XRP holders based on a snapshot of the network taken in late 2020.

That said, over 52 cryptocurrency exchanges have verified that they will be releasing FLR tokens after Flare Network has finished the FLR airdrop to exchanges, and there are only a few hours left before the Flare token airdrop to qualifying XRP holders [and the FLR token gets listed].

XRP On Chain Metrics Points To Bullish Scenario

At least 52 cryptocurrency exchanges, including Binance, Kraken, and Bitstamp, have thus far declared their support for the $FLR token distribution, which is scheduled to begin at 11:59 p.m. UTC on January 9, 2023, according to influencer “XRP Cro”.

As reported by TronWeekly, XRP’s on-chain data recently showed some intriguing network divergences that point towards a bullish scenario, leading data platform Santiment noted.

These movements include whale addresses increasing their holdings by 25%, over the past six months.

Here’s What XRP’s John E. Deaton Said To Bitcoin Maximalist

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XRP representative and attorney John E Deaton of Rhode Island claimed that the token was used as a micropayment on Twitter long before Bitcoin and it is wrong to assume that only BTC can handle instantaneous, global micro-transactions at scale.

Deaton’s remarks were in response to Anthony Pompliano [aka “Pomp,”] a fervent fan and investor in Bitcoin endorsing the dominant cryptocurrency in the Twitter payment module after Elon Musk assumed charge of the social networking following a contentious legal battle.

It was rumored that the Tesla billionaire would transform Twitter into a “super app” that was capable of far more than just microblogging.

Prior to Deaton’s reaction, Pomp had previously been rebuked by “Crypto Eri,” the creator and host of the YouTube channel of the same name who said it was “insane” to assert that only the Bitcoin network could help Twitter deal with the problem of scalable and fast global micro-transactions.

John E Deaton Rallies Behind XRP

Deaton emphasized that since the token’s designation as a “virtual currency” by the U.S. Government Accountability Office in May 2014, “XRP holders have been using this peer-to-peer decentralized payment system, particularly on Twitter.”

He also mentions the XRP TipBot, which was described in May 2020 as “a multi-platform program that monitors social media posts on Twitter, Reddit, or Discord and allows one person to transfer another XRP.”

Further, Deaton made note of SpendTheBits, which is “a cryptocurrency payment software built on top of XRP Ledger that will enable users to spend their cryptocurrency at low cost & quick speed.”

That said, the majority of the cryptocurrency ecosystems have come in support of blockchain firm Ripple in the XRP/Ripple case to highlight the risks that the XRP, Ripple, and other digital currencies are at risk from the Securities and Exchange Commission.

The court recently approved the SEC’s request for an extension of the time for all parties to submit reply papers, which leads up to this current occurrence.

Twelve amici briefs have been submitted by various cryptocurrency exchanges, developers, companies, and even individual bodies, according to Ripple’s CEO Brad Garlinghouse.

Here’s How Ripple Responded To SEC’s Request To Seal

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On 12 Sept, Ripple labs submitted a letter of response opposing plaintiff’s U.S. Securities and Exchange Commission’s request to seal portions of court documents that contain information identifying the SEC’s proposed expert witnesses.

Ripple slammed that SEC has not produced the necessary particularised proof of fact, to justify that the sealing is essential.

The letter was addressed to magistrate Analisa Torres, one of the presiding judge of the lawsuit, and was co signed by the crypto firm along with CEO Brad Garlinghouse and executive chairman Christian A. Larsen.

The SEC and Ripple previously moved to exclude the former’s expert testimony, and on 9th sept, the US regulator filed a petition to seal some of the information from the reply briefs in support of those moves. The plaintiff argued that the move was intended to protect witnesses from potential abuse.

Then in late 2020, the SEC filed a complaint against the San-Francisco based fintech firm claiming that the blockchain firm sold over $1.38 billion worth of XRP, the native coin of the XRP Ledger developed by Ripple Labs, in an unregistered securities offering.

It further accused co-defendants Garlinghouse and Larsen for allegedly aiding and abetting Ripple’s crimes.

A tweet from defence attorney James K. Filan revealed that District Judge Analisa Torres approved the SEC and Ripple‘s joint letter on Monday that outlined schedules for redactions regarding sealing issues. This action is widely viewed as an effort by both parties to expedite the ending of the lawsuit.

Meanwhile, John Deaton, Amicus Curiae in the lawsuit spoke on the possibility of the two parties striking a settlement agreement.

Ripple Labs Headed For A Settlement With The SEC?

In a twitter thread, Deaton stated that the settlement in the case depends on the SEC as well as on the revelation of the Hinman speech drafts, emails, and other related documents.

There are also speculations that in the summary judgement XRP and ETH would be compared. However, the discovery of the Hinman speech document holds the crucial factor.

According to Deaton, Gary Gensler, the chairman of the SEC, would be unwilling to compromise owing to political concerns or in other words, unless it overcomes the political advantages.

Deaton stated that Gensler would receive validation if the SEC were to obtain a Summary Judgment. This will enable the commission to defend their authority to control crypto assets.

XRP Lawyer- SEC Is “Wrong” For Labelling Eth A Security

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XRP representative John E Deaton feels that ETH is an alphanumeric code and as such the SEC labeling ETH as security is wrong.

“I’m not saying the gov’t shouldn’t go after bad actors. Going after individuals who broke the law is different”, he stated.

Deaton who is a former Marine-turned-class-action lawyer shared his thoughts on what SEC’s head Gary Gensler might do once Ethereum’s transitioned to PoS in September. He also addressed rumors of his supposed favoritism towards the SEC for going after ETH or its founders.

Recently, I was very critical of VitalikButerin over his childish and hateful comment about XRPHolders losing their rights for protection because Ripple executives described ETH and BTC as Chinese-controlled technologies 2 yrs ago when Ripple was being sued by the SEC.

He continued by saying even if he felt Vitalik’s comments to be “demoralizing and stupid”, that doesn’t mean that he would back the authorities attacking today’s ETH the way it has other tokens.

“Tokens like XRP, ETH, ALGO, ADA, XLM, etc., traded for 5-10 years should be treated as commodities, not securities”, he added.

XRP lawsuit- Ripple Would Spent $100M

The founder of the CryptoLaw, recently said that more than $15 billion were lost because the SEC “intentionally chose not to limit the allegations against Ripple to specific sales made by Ripple and its executives but instead alleged all XRP, including secondary market sales of the token, are unregistered securities.”

This was in response to a tweet from Messari CEO Ryan Selkis, who claimed that investors lost roughly $1 billion to crypto frauds last year and another $7 billion due to the SEC’s refusal for a spot ETF.

Selkis also cited statements by Ripple CEO Brad Garlinghouse, who previously claimed that the firm would spend $100 million for its legal battle with the SEC.

Earlier, Stuart Alderoty, Ripple’s general counsel, criticized the SEC’s approach to consumer protection in a recent op-ed. Alderoty said that rather than protecting consumers, the SEC intends to leave them “holding the bag.”

He then went on to add that instead of working with other regulatory agencies, SEC Chair Gary Gensler has taken an assertive regulatory stance.

XRP Holders Win The Right To Retain Amici Status

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XRP Holders got a major respite after Judge Torres denied SEC’s motion to repeal amici status and bar attorney John E Deaton from further proceedings. As per the letter, “Amici can’t participate in the expert challenge now but may file an application to brief concerns with SEC’s expert at the summary judgment”.

The latest development was shared by James K. Filan, the defense lawyer, and former federal prosecutor.

Last week, SEC filed a motion to prevent Deaton from further participating in the case. The regulator, in the heavily redacted letter, accused the lawyer of harassing SEC employees through online threats and inserting himself in the litigation.

In addition to that, the Securities and Exchange Commission also sought to revoke the amici curiae status granted to holders of the XRP tokens.  

It needs to be reminded that in March 2021, a group of XRP holders led by Deaton filed a motion to involve in the case. Although their attempt was rejected by the court last October, they did manage to obtain amici status.

Again this year, Deaton wrote a letter sent to the Members of the House Financial Services Committee alleging that the SEC’s actions were causing huge distress for the holders of the token.

The lawyer then went on to claim that the amici curiae status was for the benefit of XRP holders.

XRP Community Rejoices

Now with the latest ruling, Deaton would not only be able to stay on the case and retain amici status. But will also be allowed to raise concerns about the regulator’s expert when filing his summary judgment [SJ] brief.

Reacting to the news, an XRP member tweeted,

This is a win for sure. Although J. Torres denied Amici’s request for Daubert participation, the same purpose will be achieved by SJ participation. And although she implicitly denied access to Doody’s report, SEC already lost that issue re: Daubert motion redactions.

While some commented that Torres’ Denial of Movants’ request was somewhat of a loss for XRP holders. It’s still a win as Torres didn’t quash amici’s status.

Another user replied that it should not be considered a loss. “The judge is asking the lawyer to weigh in at summary judgment instead of now.”

SEC Seek To Ban Ripple Lawyer & Revoke Amici Status To XRP holders

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Renewing its attack against Ripple, SEC is now requesting Judge Torres to bar John E Deaton from further participating in the case. In the heavily redacted letter, the regulator accused the lawyer of issuing threats online and inserting himself in the litigation.

Besides that, the U.S. Securities and Exchange Commission has also asked the court to revoke the amici curiae status granted to holders of the XRP tokens.  

Back in March 2021, a group of XRP holders led by Deaton had filed a motion to intervene in the case. Although their attempt was denied by the court last October, they did manage to obtain amici status.

Amicus Curiae translated from Latin is “friend of the court,” which means a person or group who is not a party to an action, but has a strong interest in the matter.

Deaton, who is the founder of Crypto-Law and is representing 68,700 XRP holders in the lawsuit, has debunked the regulator’s claims against Ripple, terming them as reckless and dangerous.

Ripple Attorney Argue That Amici Curiae Status Is For benefit Of XRP Holders

In a letter sent to the Members of the House Financial Services Committee on the 19th of July, the lawyer slammed the SEC for allegedly misleading the court despite proof that XRP was not a security.

The lawyer then went on to claim that the amici curiae status was for the benefit of XRP holders and urged the committees to consider the effect of their actions on XRP investors.

“SEC’s overreach threatens the interests of not only XRP holders, but the exchanges and businesses utilizing XRP, and it implicates all other crypto assets. The ability of retail holders and small businesses to transact in XRP [and other cryptos] could be greatly impaired,” Deaton argued.

That said, the financial agency’s effort to prevent Hinman’s speech from going public dealt a heavy blow after U.S. Magistrate Judge Sarah Netburn didn’t buy SEC’s arguments that Hinman’s 2018 speech should be treated as a “personal matter” and be protected under attorney-client privilege as they were “internal documents.”

According to the ruling, the judge ordered that “the documents must be produced,” a move touted as a big win for Ripple.

Non-Ripple Developers Built Smart Contracts On The XRP Ledger

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Ripple’s attorney John E Deaton shed light on the XRP ledger’s growth trajectory. Retweeting a post by XRPL Labs’ lead developer Wietse Wind, Deaton noted that XRP Ledger now has a testnet that allows smart contracts to be built by community developers and not just Ripple’s.

The tweet comes close on the heels of the legal expert’s recent comments weighing on its tussle with the SEC.

Deaton warned that an unfavorable ruling in the U.S. Securities and Exchange Commission lawsuit against Ripple would be bad for crypto.

The managing partner of the Deaton Law Firm said the outcome of the SEC lawsuit alleging that XRP is security will determine the fate of other existing altcoins.

The SEC is not only alleging the way Ripple offers and sells XRP is illegal but that ALL XRP are unregistered securities. It’s the functional equivalent of claiming the oranges or groves in SEC v. W.J. Howey Co. were securities. If successful, then almost every other altcoin is security.”

To strengthen its legal fight against the SEC, the Blockchain payment firm has recently hired two Kellogg Hansen lawyers.

Ripple rolled out Hooks Builder

A few days ago, Ripple’s XRPL Lab launched Hooks Builder, which enables smart contract functionality to the blockchain, where developers can control the transaction flow/behavior by embedding “hooks” – small units of code.

Project lead Wietse Wind, who designed Xumm, shared the new development with the XRP community via his official Twitter handle.

Wietse Wind wrote, 

“One of the biggest things for the XRP Ledger (but I’m biased). Today the world can build “layer 1” smart contracts on the XRP Ledger, with our now published browser-based “Hooks Builder”, on our live “Hooks Testnet”. All the Hooks source code is now public + PR to rippled.”

The blockchain firm also revealed that it’s also working with another development organization named Equilibrium to make everyone familiar with Hooks.

“To allow everyone to get familiar with Hooks, build them, test them, share them, break them, we also worked with great people at Equilibrium.”

Just the other day, one of Ripple’s fastest-growing projects, onXRP, announced the integration of the Banxa fiat on-ramp technology into its ecosystem, TronWeekly reported.