Crypto Lawyer Blasts SEC’s Ripple Lawsuit as Case Drags On

Ripple CEO Brad Garlinghouse revealed Monday that Ripple Labs will spend around $200 million on legal fees to fend off an aggressive SEC lawsuit. But one lawyer and crypto bull explains why the case doesn’t cut the mustard.

John Deaton, the founder of Crypto Law and owner of the Deaton Law Firm, recently described the suit’s merits as cosmically “far-fetched” in a stern dressing down of the SEC suit. He shared his arguments to the court in his amicus curiae brief in a tweetstorm on May 4th.

Crypto Lawyer Blasts SEC’s Arguments

Deaton summarized the SEC Ripple lawsuit with his considerations and opinions. He said Ripple has been fulfilling financial settlements for transactions for years. But the SEC suit regards every sale of XRP as something akin to an ICO sale. Deaton balks at this view of Ripple’s business.

Deaton argues the SEC has overstated its case to a ridiculous degree. He thusly mocked the Securities and Exchange Commission’s claim on XRP sales:

“The SEC’s XRP theory is so farfetched, it travels through space and time, into the future, capturing all possible future sales, even in far-away lands… The scope of the SEC’s Howey argument has become so stretched that it is truly indefinable, in space, or in time.”

At its worst, the SEC lawsuit against Ripple has failed to cite any legal authority or precedent to justify its definition of XRP as a security. Instead, Deaton says the commission has asserted an overly broad, essentially meaningless definition of security applies to XRP.

Ripple Labs to Spend $200 Million in Defense

Ripple CEO Brad Garlinghouse addressed the XRP Las Vegas 2023 event this weekend. His remarks were a big hug to the community for their support during the suit.

Garlinghouse revealed for the first time Monday to CNBC that his company has paid $200 million so far to defend itself from the SEC. During a fireside chat with Dan Murphy at the Dubai Fintech Summit, the Ripple CEO said:

With the SEC, we will spend – this is the first time I’ve shared this publicly – by the time all’s said and done, we will have spent $200 million defending ourselves against a lawsuit, which from its very beginning, people were like, well, this doesn’t make a lot of sense.”

News of the enormous sum on legal defenses was met with mixed reactions. While some in the Ripple community praised the company’s work to fend off onerous regulations, others, like crypto YouTuber Lark Davis, said it was too much to spend and a waste of resources.