xrp

US securities regulator moves to bar XRP holders from helping Ripple in court

The U.S. Securities and Exchange Commission (SEC) is seeking to bar XRP holders from coming to Ripple’s legal aid. In its latest court motion, the regulator also moved to prohibit attorney John Deaton from participating in the court process.

In its motion, filed with the Southern District of New York, the SEC opposed six XRP investors’ motion to file an amicus brief regarding the opinions of one of the experts it brought to court. The expert spoke on the expectations that XRP investors had when they purchased the token

The SEC also opposed Deaton’s “attempts to insert himself into the case.” Deaton, an attorney who has been an outspoken advocate for Ripple, filed a motion to intervene on his, and other XRP investors’ behalf. He has claimed openly that the SEC’s lawsuit has deprived XRP investors of profits from their XRP investments. 

Deaton filed the motion to intervene last year. In October, the court denied this motion but granted the XRP investors amici curiae status, which in legal terms means a friend of the court. At the time, the court ruled that such an intervention would “unduly delay or prejudice the adjudication of the rights of the SEC and defendants.”

In its recent motion, the SEC called on Judge Analisa Torres to deny the XRP investors’ motion to intervene for five reasons, one of which is that they don’t propose a briefing on legal issues. Instead, they wish to use over 3,000 affidavits they collected from XRP investors attesting to facts they deem relevant to the proceedings.

The SEC further believes that the movants’ brief would duplicate Ripple’s efforts since their interests are aligned. 

“Defendants and Movants thus continue to share a common perspective as to the effects and desired resolution of this action. The motion thus presents no unique or perspective that can help the Court beyond the help that the lawyers…are able to provide,” the SEC’s motion stated.

Even if Deaton and the other XRP holders had relevant evidence that XRP has utility as a currency, the SEC says that’s not the issue at the heart of the lawsuit. The watchdog reiterated that it sued Ripple because the company sold XRP as part of an investment contract and is, therefore, a security under the Howey test. 

The latest move comes just days since Judge Sarah Netburn ruled against the SEC’s attempts to block access to Hinman’s speech in which he claimed Ether wasn’t a security. The judge ruled that the speech didn’t qualify for attorney-client privilege and claimed that the SEC was being hypocritical in its defense.

Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups from BitMEX to BinanceBitcoin.comBlockstreamShapeShiftCoinbaseRipple, EthereumFTX and Tether—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.

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