SEC v. Ripple: XRP holders declare victory as judge grants motion to intervene

XRP holders are now claiming victory as attorney John Deaton has been allowed to file a motion to intervene in the ongoing case between the Securities & Exchange Commission (SEC) and Ripple Labs.

Permission to file a motion to intervene 

According to the court order, Deaton was granted permission to file a motion to intervene in the case on behalf of XRP holders by Judge Analisa Torres. A motion to intervene must be filed no later than April 19, according to the ruling by Judge Torres. The SEC will then be able to file its opposition papers by May 3. The court order stated:

By May 17, 2021, the proposed intervenors shall file their reply to Plaintiff’s opposition papers and Defendants’ response papers, if any, and Plaintiff shall file a reply to Defendants’ response papers if any.

XRP holders previously claimed that their interests are not being adequately represented in the SEC's ongoing case against Ripple Labs and have sought to intervene with an initial filing. However, Deaton’s letter, initially representing 6,000 XRP holders to intervene in the lawsuit, was denied in mid-March.

Attorney Deaton did not give up and refiled the motion, representing 10,000 XRP holders the second time. An XRP holder himself, Deaton noted that the SEC’s action has resulted in the decline of the cryptocurrency’s value by over $15 billion.

The SEC urged the court on March 26 to prevent XRP holders from intervening in the case. The securities regulator put forward the argument that allowing XRP holders to intervene in the case would cause an “avalanche” of claims, as well as “complexity and confusion.”

Setting the record straight

The SEC’s vague claims against Ripple have rather ignited a remark made by one of the agency’s attorneys, indirectly indicating that cryptocurrency exchanges could relist XRP without violating any laws.

While urging the court to deny the motion to intervene, the SEC stated that reinstating “speculative trading” of XRP at crypto exchanges could play into Deaton’s intention of doubling the price of the digital asset. The regulatory agency cited a previous FXStreet article, saying:

As Movant Deaton has stated elsewhere, the purpose of re-listing appears to be so that XRP’s price could double.

Stating that he does not talk about the XRP price, Deaton clarified that SEC attorney Tenreiro is “clearly trying to make me look bad by claiming that my motivation in seeking to intervene is for profit-taking.”

Deaton only commented on the likelihood of whether the SEC would give the green light for exchanges to relist XRP, especially since its price could double, enabling Ripple Labs to have twice the money to go forward with the case. 

The SEC’s letter to Judge Torres objecting to the motion to intervene is one of the most misleading letters he has ever read, he added.

Attorney Deaton plans to dispute the SEC’s argument that XRP does not have any utility by gathering businesses, developers and entities that use XRP operationally.