The SEC wants to prevent specific “friends of the court” who support Ripple from offering legal assistance to the defense as the lawsuit against Ripple continues.
The Securities and Exchange Commission (SEC) of the United States is attempting to prevent Ripple (XRP) holders from supporting Ripple’s defense and forbid attorney John E. Deaton from participating in any further proceedings.
The regulator objected to the selection of John E. Deaton and 1,746 XRP holders as “amici curiae” in an official objection made on Tuesday.
Amici (plural: amici curiae) is Latin for “friend of the court” and refers to a person or organization that is not a party to a lawsuit but is allowed to support a court by offering knowledge, insight, or assistance. In this instance, in defense of Ripple.
Deaton has 3,252 affidavits signed by token owners who effectively claim that they are losing money as a result of the SEC’s case against Ripple.
In the affidavits, holders assert that they either failed to accept legal responsibility for purchasing XRP, bought the tokens for use rather than for investment, or failed to buy in response to promises made by the business and its personnel.
The commission objected to XRP holders, saying they were attempting to operate outside of absolutely legal constraints. The SEC reported:
“Movants do not propose briefing on legal issues. Instead, they wish to present arguments based on 3,252 affidavits ‘attesting’ to certain facts.”
The commission dismissed Deaton as an amicus because of alleged threats he made against former SEC Chairman Jay Clayton. Using a YouTube clip from 2021 in which Deaton said he “may have to walk over and slap the [profanity] out of former SEC Chair Jay Clayton,” the SEC filed a redacted letter dated June 7 to Judge Torres.
By July 25, the XRP holders and Deaton as amici must publicly respond to the SEC’s complaint.
The blockchain business Ripple is in charge of issuing the XRP token. In an ongoing legal dispute that was initiated in 2020, the SEC has claimed that Ripple and its executives Christian Larsen and Brad Garlinghouse offered XRP as unregistered securities.
Deaton questions how the SEC handled McCaleb.
Deaton, meanwhile, asserted that the SEC had applied the law inconsistently to Ripple, Garlinghouse, and Larsen. The attorney noted in a thread on Twitter on Tuesday that if the SEC had actually believed that XRP was a security, it would have sued Ripple and forbidden the two executives and Jed McCaleb from selling his coins.
Jed McCaleb, a co-founder of Ripple, has sold nine billion XRP since he left the organization in 2014.
Whether XRP is classified as security may depend on how this case turns out. If the judge rules in the SEC’s favor, it may set the precedent necessary for the agency to take legal action against other cryptocurrency ventures that offered coins identical to those issued by Ripple.
