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XRP Lawyer Hints at How Coinbase Might Win in SEC Lawsuit

Tue, 08/29/2023 - 16:30
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Tomiwabold Olajide
SEC filed lawsuit against Coinbase in June
XRP Lawyer Hints at How Coinbase Might Win in SEC Lawsuit
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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.

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."

SEC v. Coinbase: 2,300 Crypto Holders Sign up as Amici Curiae

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.

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About the author

Tomiwabold is a cryptocurrency analyst and an experienced technical analyst. He pays close attention to cryptocurrency research, conducting comprehensive price analysis and exchanging predictions of estimated market trends. Tomiwabold earned his degree at the University of Lagos.