Founder of CryptoLaw Attorney John Deaton warns SEC’s success against Ripple would affect every other cryptocurrency. Deaton points to the wording of the SEC’s complaint, stating that any other cryptocurrency can be substituted for XRP.
The SEC vs. Ripple case is long drawn out and has been the subject of a lot of speculation as to what the outcome and consequences could be for the cryptocurrency market. Attorney John Deaton, the founder, and host of CryptoLaw – an XRP advocacy movement has warned that the entire cryptocurrency community should be worried about what the Securities and Exchange Commission (SEC) is trying to achieve with its lawsuit against Ripple.
“Even if you hate the company Ripple and you despise the digital asset XRP, you better be praying that the SEC fails in what it is trying to do,” he said adding “it is going to affect everybody.”
His argument is basically that the way the SEC frames its case against Ripple is particularly dangerous as it could be juxtaposed to any other cryptocurrency in existence and still apply if the commission is successful in the Ripple case.
The SEC currently argues that Ripple’s sale of its “XRP token” amounted to selling an “unregistered security.” Deaton thinks that the statement currently makes others feel safe as they misconceive it to only be applicable to XRP, but he feels the argument is a catch-all one that is a threat to any crypto-asset including Bitcoin.
To support his argument, Deaton took apart the SEC’s amended complaint against Ripple filed in February. He pointed out that all that was needed was to substitute XRP with any other cryptocurrency and the allegations made would apply to them. A few he points out include the allegations that XRP holders resell the asset to others, that the primary use case is speculation, investors and users of the XRP ledger rely on Ripple to maintain the ledger and bring in profit, as well as, the allegation that by Ripple, XRP holders and buyers on the secondary market were all in a common enterprise.
He also adds that if Bitcoin proponents thought they were safe, they should have a rethink as the SEC has in the past held that Bitcoin was “sometimes” a security according to its Former Commissioner Joseph Grundfest.
The warning is timely and not without some substance. It is even likely the way a lot of crypto-proponents feel as there is almost joint consensus in the community that the outcome of Ripple’s case would have far-reaching consequences for the community and the kind of powers the SEC would hold over it.
Meanwhile, in the lawsuit, Ripple had scored another triumph as Judge Netburn ruled that the SEC should respond in detail to Ripple’s interrogatories that apply to how the commission reached its conclusion on the status of Bitcoin, Ethereum, and XRP using the Howey Test.