SEC Claims XRP Holders Are “Too Partial,” Citing Physical Violence References

The U.S. Securities and Exchange Commission has filed another reply memorandum of law, opposing XRP holders’ intervention in the Ripple case.

The agency states that they cannot appear as amici curiae (“friends of the court”) because they are “too partial” and their interests align with those of the defendants.

Movants’ counsel John Deaton is also being accused of attacking the SEC:

And Movants’ counsel uses profanity and references physical violence in publicly attacking the SEC and its staff.      

In its initial reply, the SEC cited two occasions when Deaton resorted to physical violence references:

For example, in response to a report about a discovery dispute in this matter, Deaton tweeted on March 12, 2021: “[T]here is only one way to deal with a bully. PUNCH THAT MF IN HIS FACE . . . I’m up at 3 am for a reason [profanity] See you soon @ SEC_News.” On March 3, 2021, Deaton posted a video that he described as a “mock cross examination” of Chairman Clayton containing many inflammatory statements, including about supposed drug use, and that Deaton “might have to walk over and slap the [profanity] out of” Chairman Clayton   

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The SEC also states that the movants are attempting to “inappropriately” expand the issues of the Ripple case after previously mentioning that an intervention would compel the regulator to bring an enforcement action against them.

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Deaton denies promoting violence

In turn, the movants claim that the SEC is “attacking the messenger” by portraying Deaton as an "unhinged conspiracy theorist crusader.”

The counsel denies inciting violence, downplaying his above-mentioned comments as “satirical” and “humorous”:

For the SEC to use the above scenario and imply or suggest that Attorney Deaton was promoting violence or drug use is sad and pathetic. It is a clear attempt to cast Attorney Deaton in the most unfavorable light, hoping that it will have a negative impact on the motion to intervene.

In addition, XRP holders reiterate that they have a “cognizable interest” in the case, but they are not adequately represented by Ripple.