By Hassan Mehmood (Saudi Arabia)
Last year, the SEC charged Ripple Labs executives for dealing in unregistered securities and raising $1.38 billion. The lawsuit is still going on despite a slew of legal victories on the part of Ripple. One of these major victories was getting a seat for the movants at the defence table. However, SEC has filed a counter-motion to get these movants off from the case.
The new motion filed by SEC aims to prevent six main XRP investors, namely Jordan Deaton, Mya Lamonte, Kristina Warner, Tyler Lamonte, and Mitchell McKenna, from obtaining a pass into the court under the capacity of third-party defendants or Amici Curiae. These six personages are collectively referred to as the movants, and they are charged with the duty of representing 17,000 XRP holders who have stakes in this lawsuit. Attorney John Deaton, who has also served under the capacity of Marine Corps Judge, is spearheading the XRP investor’s petition to get a seat in court.
SEC is Seeking to Set a Precedent for Dealing with Cryptocurrencies in General
The general sentiment in the crypto community is that SEC wants to open up a pandora box that would surround the entire crypto market like a cyclone. According to the latest petition, SEC lawyers want to persuade the court of law that the motif of movants intervention is biased. As stated in their letter of submission, the movants have a vested interest in the survival of XRP. Therefore, they would not remain true to Amici Curiae’s title (friend of the court).
Also read:On the other hand, defence lawyers argue that SEC’s attitude towards movants is based on heresy, speculation, facts manipulation, and legal jargon. Additionally, Deaton mentions that movants have a right to put forward their perspective in the court as the current participants are not fit to speak on behalf of the XRP investors in the United States. Deaton also said that SEC is using red herrings and personal attacks to cast the counsel in the most unfavourable light.
Where would the Ripple Labs Lawsuit End?
According to some legal analysts, SEC’s newfound dedication to Ripple Labs could prove detrimental for the crypto enterprise. The chances of movants getting a favourable ruling are as slim as they are. On the other hand, if the movants claim a victory, SEC lawyers are preparing to file for a four-month extension in lieu of discovery. For the time being, Ripple Labs is standing at the paradoxical route.
The eventual step for SEC would be to get access to the attorney-client privileged information from Ripple Labs lawyers. The lawsuit states that their lawyers warned defendants Chris Larson and Brad Garlinghouse that they could be charged with violation of Section 5 in the Securities Act of 1933. In addition, SEC is also sending out MOUs to foreign exchanges to extract information about misconduct in those regions.
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