According to attorney John E. Deaton, the SEC’s case against Ripple could reach the U.S. Supreme Court before Congress establishes any regulatory framework for the crypto industry.
To provide more context, the Ripple case is currently being heard in the district court, and it would need to go through the circuit court of appeal before it could potentially reach the Supreme Court, according to the legal process.
The founder of CryptoLaw shared this perspective on Twitter today. He commented in response to recent indications that the SEC intends to continue its rapid enforcement actions in the cryptocurrency industry.
FOX Business journalist Eleanor Terrett shared a portion of the SEC’s latest budget proposal highlighting the agency’s commitment to investigating and taking legal actions against cryptocurrency companies that do not comply with regulations. The SEC’s plan to expand its cryptocurrency enforcement unit, which has already doubled in size over the past year, is indicated by this proposal, according to Terrett.
Referring to Eleanor Terrett’s discovery, attorney John E. Deaton restated that there will likely be no regulatory clarity for the cryptocurrency industry over the next two years except through court decisions. Although Deaton acknowledges this is not the ideal situation, he believes it is the current reality.
“Hell, the Ripple case could be heard by the Supreme Court before Congress acts,” Deaton tweeted. “We must fight in the Courts.”
In January, attorney John E. Deaton claimed that the only way for the cryptocurrency industry to gain regulatory clarity in the next two years would be through the outcome of the Ripple case, which would determine whether XRP is an unregistered security. Deaton supported his argument by pointing out the polarization of Congress and the negative impact of the FTX collapse on lawmakers’ attitudes toward the industry.
The lawyer representing numerous XRP holders as a friend of the court in the SEC’s case against Ripple stated that with each passing day, Judge Analisa Torres’ upcoming decision becomes increasingly significant.
However, he expressed confidence that the federal judge would not rule that secondary market sales of XRP are unregistered securities. Attorney John E. Deaton explained that there is no prior legal precedent for such a decision, and Judge Torres is committed to following the law.
“No way the Judge adopts the SEC’s unconstitutional theory that the asset itself is always an investment contract,” Deaton stated in a tweet. “There isn’t a case in 80 years since Howey that makes such a finding. Judge Torres religiously follows the law. She won’t conclude secondary sales violate Section 5.”
Read article: Brad Garlinghouse Reassures Ripple Investors Amid SVB Collapse
As reported earlier, attorney John E. Deaton has expressed that the SEC’s only potential victory in its case against Ripple is if it can prove that Ripple sold XRP as a security between 2013 and 2017.
Last week, Judge Torres ruled on Daubert’s motions, which aimed to exclude expert testimony in the SEC’s case against Ripple. The ruling was generally interpreted as a victory for Ripple, with Stuart Alderoty, Ripple’s General Counsel, expressing increasing confidence with each ruling.
John E. Deaton has forecasted that the judge’s decision on summary judgment in the SEC’s case against Ripple will be announced shortly.
