A federal court has chastised the SEC’s attorneys’ behavior in the case, labeling them self-serving, in a shocking move in the continuing legal conflict between Ripple Labs and the US Securities and Exchange Commission (SEC), as was shared by the top crypto lawyer John Deaton.
Latest on the Ripple-SEC Lawsuit
The comments by Judge Sarah Netburn come as the parties await a much-anticipated summary judgment in the case that could have far-reaching implications for the regulatory status of digital assets.
Deaton has been a vocal critic of the SEC’s stance in the case. He has argued that the SEC’s claim that XRP is a security is without merit and that the commission should have recommended a cease and desist letter instead.
The lawyer has also highlighted the SEC’s strategy of expanding its definition of what constitutes a security, focusing on the underlying digital asset and including secondary market sales.
He contends that the SEC’s embodiment theory, which states that XRP encompasses all of Ripple’s efforts, is incorrect and that the agency is attempting to apply its legal framework to a new sector retrospectively. The SEC’s theory asserts that XRP includes all of Ripple’s activities.
The crypto community has been keeping a close eye on the case because it has the potential to serve as a model for how the United States government will regulate digital assets in the future. The judge’s criticism of the SEC’s behavior in the case raises worries concerning the objectives of the commission and might play a role in determining the result of the case.
Amicus Curiae, a group of XRP holders who have chimed in on the matter, has predicted that Judge Netburn would have a difficult decision to make. The XRP memo, which is protected by the Deliberative Process Privilege, was disclosed by the court; nevertheless, it did not include any recommendations at the conclusion of the document.
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