The class action lawsuit that John E. Deaton is seeking against the SEC has already been signed by 2,7000 XRP HODLers.
According to Jeremy Hogan and John Deaton, the legal battle between Ripple and the SEC can only provide regulatory clarity to a limited extent, as this is something that the US Congress must do.
“Crypto Eri” spoke to arguably the most popular lawyers in the XRP community at the moment, John E. Deaton and Jeremy Hogan, in a new video. The latter is known for regularly sharing updates on the current state of the SEC’s lawsuit against Ripple on YouTube, while Deaton is the XRP community’s lawyer and is seeking a class action lawsuit against the SEC.
Deaton reported yesterday that 2,700 XRP HODLers have already signed the letter of intent to join the lawsuit against the U.S. Securities and Exchange Commission (SEC). He is currently still seeking individuals who owned and currently own XRP as of December 22, 2020.
Basically, all XRP holders worldwide can participate in the lawsuit. In the interview with Crypto Eri, Deaton revealed on the current progress of his efforts:
I will tell you that this time next week everything is going to come into focus about what we are doing here as the XRP community and how it’s really come into place. […] I know it’s a bit vague, but standby. It will be worth it.
For his part, Hogan stated that Deaton’s efforts are of great importance, also for the Ripple vs. SEC case. Judge Torres needs to query a list of related cases, and needs to see the massive negative impact on individual XRP holders, which will reinforce Ripple’s arguments. Regarding Judge Torres, he said:
She needs to understand all the effect all this stuff is having on individual holders of XRP. […] So what John is doing is getting all the individuals together in his lawsuit. Now, in Federal Court you have to always file what’s called a notice of related cases. So the judge needs to know what cases are currently out there related to the case. So the judge gone notice that Johns lawsuit is out there and is going to see all the effects that the SEC vs. Ripple lawsuit is having on individual holders of XRP.
Will there be regulatory clarity for Ripple?
The two attorneys also discussed whether the SEC litigation will provide final regulatory clarity. In doing so, Deaton and Hogan agreed that the case will not provide that hope for the XRP community. Hogan pointed to the most recent example, Kik Interactive’s case against the SEC, noting that the company received three conditions: a ban from violating the law again, a fine, and a condition to sell the KIN token only to accredited investors.
According to Hogan, this could be the “worst case” for Ripple. So the focus of the court battle could be on Ripple’s escrow account. However, there could still be uncertainty about XRP’s classification as a security or non-security in the U.S. after the ruling. Hogan stated:
This case is probably going to come down, in my opinion, to summary judgement which is making the judge the decision, and this is what happened in the Kik Interactive case. […] I don’t think that the security status of XRP is going to make it to trial, I think it’s a summary judgement. […] I think we have a judge who is able to make that decision.
Deaton added that the classification of XRP is ultimately the job of the U.S. Congress. There will be no decision from the court, as there was in the U.K., where the Financial Conduct Authority (FCA) declared three types of tokens and classified XRP as a hybrid between a utility and an exchange token:
What people want in the XRP community, they’re not going to get it from the court. Only congress can do that.
Hogan, in turn, noted that the judgment will give “clarity” but “not a designation that it is a non-security token.”
Cause if you have a judgement or a settlement in your favor, the case is over. The SEC can’t sue you again and try again. So you’re going to get effectively some clarity as far as Ripple is concerned as far as XRP is concerned – even though you’re not going to get a piece of paper from the judge saying that XRP is not a security from now till the end of time.
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