Review of John Deaton's Legal Opinion on the Ripple and XRP Case by Mount Equity Group

 

Although there have been other contentious lawsuits, XRP v. SEC is the one that everyone is paying attention to right now. According to Mount Equity Group Review, the lawsuit's potential long-term effects on the whole Financial Technology industry are what really warrant international interest. The outcome of this particular case could either make or break the Fintech sector as a whole.

Overview of XRP versus SEC

Since it's causing a problem with an existing asset years after its distribution, this specific case is special, according to attorney John Deaton. Aware that XRP was not a security asset in 2019, Coinbase Global, Inc. (Coinbase) contacted the Securities and Exchange Commission (SEC) about it.

The SEC made no statements at the time to convince Coinbase to change its mind. The SEC ruled that Ripple had to register XRP even though it had already been part of the ecosystem for some time at that point, 18 months after XRP was listed. Since the SEC normally established this distinction before release, the post-release revision increased its contentiousness.

Mount Equity Group Review finds that Ripple marketed, packaged, and advertised XRP differently from a security asset. If the SEC had sued Ripple for offering and selling unregistered security assets between 2013 to 2017, those transactions would have constituted unregistered securities. That decision would not have been controversial, but instead, after years of being in public exchanges and platforms, the SEC suddenly declared that XRP is a security asset and sued the company for failure to register, among other things.

Usually, the SEC sues individual executives alleging fraud or deceit, misrepresentation, market manipulation, and fact omissions. However, in this case, they acted too late, prompting reactions from professionals all over the Fintech sector.

The Curious Case of the SEC and Association with XRP Rivals

Bill Hinman reportedly received $15 million from his law firm Simpson Thacher & Bartlett, LLP, a participant in the Enterprise Ethereum Alliance, while serving as an SEC commissioner, according to the Mount Equity Group Review. Hinman's speech was allegedly aided by Ethereum investors.

Jay Clayton files a lawsuit against XRP as he is about to retire, and less than ten weeks later, he starts working for One River. Coincidentally, One River stakes $1 billion on Ethereum and Bitcoin. When you find out that Joe Lubin, the co-founder of Ethereum, ConsenSys, and Sullivan and Cromwell, a law firm represented by Clayton, are involved, the plot thickens even more. In order to acquire Quorum, a direct rival to XRP from JP Morgan, the company arranged a contract between ConsenSys and JP Morgan.

John Deaton is optimistic that an investigation will be conducted at some time to look into these matters because this case injured thousands of XRP investors. Whether or if there was criminal activity involved can be officially decided.

Can You Sue the SEC?

It's challenging because anyone wishing to challenge the SEC must give notice, giving them six months from the notice to the actual litigation. However, the SEC enjoys qualified immunity, which precludes lawsuits for errors made by employees while they are engaged in the course of their duties. In order to prove beyond a reasonable doubt that the conditions go beyond the normal course of the job, those bringing a case against an SEC official should do so.

Bottomline

There have undoubtedly been many responses from the Fintech sector to the XRP v. SEC case. Sources claim that certain people are unable to change their XRP into Bitcoin, Ether, or US dollars and have their funds blocked pending the resolution of this lawsuit. While some people argue that governments should regulate cryptocurrencies like XRP, others claim that the SEC functions in a conflict of interest. Regardless of your position on the issue, there are many lessons to be drawn from this case.