XRP lawyer John Deaton believes the Coinbase and US SEC lawsuit might result in a split victory owing to its complicated layers By Godfrey Benjamin 51 mins ago Updated 51 mins ago
Crypto lawyer and XRP proponent John E. Deaton has predicted the possibility of having a split victory in the lawsuit between American cryptocurrency exchange Coinbase and the Securities and Exchange Commission (SEC).
The Split Victory Projection
According to John Deaton, there are aspects of the lawsuit that Coinbase is billed to take a victory but he pegs the chances of a complete victory at 5%. Deaton argued that based on precedents regarding the Howey Test, there has been no indictment for the sale of assets on exchanges or secondary marketplaces in about 80 years.
As I argued in my amicus brief in the @Ripple XRP case, there isn’t a single case in EIGHTY YEARS where a Court found a secondary sale of an asset satisfied the Howey test – even if the asset had been sold originally as an investment contract.
— John E Deaton (@JohnEDeaton1) October 23, 2023
Best Crypto Exchanges and Apps September 2023 Must Read Top Meme Coins to Buy Now: What You Need to Know Must Read Top 10 Web3 Games To Explore In 2023; Here List Must Read
He believes the precedent set in the Ripple vs SEC case in which Judge Analisa Torres ruled that XRP is not security is a major boost for Coinbase. The XRP lawyer believes Coinbase has been quite strategic in the way it argues its case against the SEC and some of the charges will be treated in isolation.
It is based on this isolation that Deaton believe Coinbase will score some points against the SEC. However, he did not foresee a scenario where the trading platform could wriggle itself out of the staking component of the lawsuit.
Basis for Coinbase’s Motion to Dismiss
In the first week of August, Coinbase filed a motion to dismiss the case brought upon it by the regulator. The SEC was accused of violating due process and abandoning its own earlier interpretations of the securities law. Paul Grewal, Coinbase’s Chief Legal Officer (CLO) explained that the SEC has trampled the strict boundaries on its basic authority set by Congress by paying no attention to the precedent.
At this point, Grewal referred to the XRP lawsuit to buttress the fact that the SEC will only try to overstretch and portray a simple asset sale as a security. In response to Coinbase motion for dismissal, the SEC asked the court to deny the request and Ripple’s General Counsel Stuart Alderoty found this move to be baseless.
Deaton, on the other hand, sees the possibility of the regulator winning in the case of the motion to dismiss. He also thinks that the exchange may get a huge victory related to the token asset sales as a result of a split decision.