John E. Deaton, a lawyer who focuses on the cryptocurrency industry, along with other lawyers, shared more details on Twitter yesterday regarding the US Securities and Exchange Commission’s (SEC) lawsuit against Ripple Labs.
The case was filed in recent weeks, just days before SEC Chairman Jay Clayton left, so there was speculation about the unknown motives of senior officials behind the case.
Deaton followed the same view and made various claims. The renowned attorney claimed that former US President Ronald Reagan, Joseph Grundfest, a former SEC commissioner, warned investors Jay Clayton and the SEC to sue Ripple Labs for “potentially billions of losses”. It was reported that Grundfest sent a letter to Clayton before filing the case, where he gave a detailed warning about the results and also questioned the reasons.
According to Deaton, Grundfest warned that simply suing XRP by declaring it an unregistered security would “lead to an UNSEARCHED scenario of billions of dollars in losses from migration of intermediary market service providers. Deaton said this was a direct quote from the former SEC official who saw everything coming:
“BY GRUNDFEST, IF THE SEC LAUNCHES A SANCTION ACTION THAT PROVIDES XRP AS AN UNREGISTERED SECURITY, THESE EXCHANGES WILL STOP AND STAY A SEC ACTION AGAINST THEM.”
Like Abra’s CEO Bill Barhydt, Grundfest expressed its concern because “XRP has been publicly traded in the US and globally for SEVEN YEARS with the full awareness and implicit permission of the SEC, and the SEC has He was aware that the company was actively traded on more than 200 stock exchanges worldwide, including the US ”
In addition, attorney Deaton stated that the SEC’s complaint against Ripple Lab and its founders had no allegations of fraud or misrepresentation. He said that, given the fact that no fraud has been alleged and that XRP has been allowed to trade for more than 7 years, Grundfest opposed Clayton as “There is no immediate reason to enforce an emergency action.” As XRP investors well know, Clayton ignored this warning.
As Attorney Deaton pointed out, Grundfest questioned Clayton and the real reason for the SEC. It is also reported that Grundfest said that applying existing securities laws to XRP but not to ETH “questioned the Commission’s discretion”.
“IF TODAY’S XRP IS A SECURITY, SO IS ETH.”
According to Deaton, Grundfest basically held that “to Clayton and SEC, if you file this case, if you claim that XRP is a security, it is considered to be due to other unrelated reasons”.