XRP holders' attorney John Deaton hints at a seeming edge that Coinbase has in the SEC lawsuit against it.
In June, the SEC filed a lawsuit against Coinbase, alleging that it violated federal securities laws by acting as an unregistered broker, exchange and clearing agency, citing 13 cryptocurrencies as instances that it believed fit the classification of securities.
If you’re a @coinbase customer and object to the SEC’s lawsuit and bad behavior, you have an opportunity to be heard. We don’t let the SEC or Coinbase speak for us. We made a difference in the Ripple case, we can make a difference again.— John E Deaton (@JohnEDeaton1) August 29, 2023
I don’t entirely rule out Judge Faila… https://t.co/Udv2swSL97
Deaton says although he can predict the chances of other issues pending in the lawsuit, including that of staking offerings, he believes Coinbase has at least a 25% chance of winning on the basis that its token sales are not investment contracts or securities as a matter of law.
Coinbase has requested that a judge dismiss the Securities and Exchange Commission's action against it, claiming that the SEC is suing the crypto exchange outside of its jurisdiction, maintaining it does not offer securities.
Its motion to dismiss pointed to the July 13 ruling in the SEC's case against Ripple, wherein a federal judge ruled that XRP sold on exchanges or through algorithms did not qualify as securities.
In this sense, Deaton has no idea what the outcome of Coinbase's motion to dismiss the SEC complaint will be. He, however, thinks that the request to dismiss might be denied.
"I don't entirely rule out Judge Faila granting Coinbase's motion to dismiss or at least partially granting it. Normally, I would say I'm 99% sure a motion to dismiss is going to be denied."
In light of this, Deaton urges Coinbase customers who object to the SEC lawsuit to make their voices heard. He believes a difference was made in the Ripple lawsuit when 75,000 XRP holders joined in filing an amicus brief, and he believes the same can be achieved in the Coinbase lawsuit.