John Deaton, a recognized attorney who represented 75,000 XRP holders, addressed the legal dispute between the SEC and Ripple during a discussion on the 3T Warrior Academy YouTube channel. Deaton regarded the SEC’s litigation as an “unprecedented move” in securities law over 75 years, with implications for the crypto industry and XRP investors.
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Deaton’s Critique of the SEC’s Actions
John Deaton gave strong criticism of the SEC’s classification of XRP as a security referring it as a huge overreach. Deaton argued that the SEC’s actions had impact on XRP holders, particularly minor investors who experienced a loss of billions in the market following the announcement of the lawsuit.
Deaton asserts that the SEC’s actions resulted in a $15B loss in value for XRP, which caused harm to numerous retail investors. Filed in late 2020, the case resulted in XRP being removed from exchanges, therefore aggravating the circumstances for token owners.
Despite obstacles, Ripple finally had a positive decision since the court judged XRP itself to be not a security. Still, the fight has had effect on Ripple as well as the larger crypto market.
Financial Losses and Legal Costs
Deaton highlighted the financial repercussions of the lawsuit for Ripple and its investors. He emphasized that Ripple was compelled to incur legal expenses exceeding $100M to defend itself.
The SEC would not back down in the face of multiple attempts to contradict the agency and get the phrase designating XRP as a security removed. Deaton maintained that holders of XRP should be compensated for the losses they sustained directly as a result of the SEC’s actions.
The attorney further suggested that the lawsuit was less about protecting investors and more about the SEC exerting bureaucratic power. He called for greater accountability within the regulatory body, stating that reparations should be considered for the affected investors.
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Broader Discussion on Government Overreach
In addition to the lawsuit, Deaton spoke about the broader implications of government overreach in the financial sector. This is particularly with regard to Central Bank Digital Currencies.
He warned that increased government control over digital assets could pose a threat to individual financial freedom. Deaton expressed concern about the potential consequences of government-controlled currencies, advocating for clearer regulations to prevent similar lawsuits in the future.
Deaton’s discussion also touched on the need for clear and definitive legislation regarding cryptocurrencies and digital assets. He suggested that Congress should have acted sooner to prevent regulatory uncertainty, which has stifled innovation in the U.S. crypto market.
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