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John E. Deaton, a prominent advocate of cryptocurrency and supporter of XRP, commented on the possibility of a partial victory for Coinbase in the ongoing lawsuit between Coinbase and the Securities and Exchange Commission (SEC).
Will Coinbase Win the Lawsuit?
According to John Deaton, there are aspects that could lead to Coinbase’s victory in the lawsuit, although the chances of a complete victory are only 5%. Deaton associated the lawsuit with the Howey Test and argued that there has been no claim for the sale of assets on exchanges or secondary markets for approximately 80 years.
Judge Analisa Torres’ ruling in the Ripple vs SEC case, stating that XRP is not a security, is believed to be a significant indication for Coinbase. Deaton, the XRP attorney, suggests that Coinbase’s defense strategies in the lawsuit against the SEC could provide certain advantages based on individual examinations of the allegations.
Basis of Coinbase’s Lawsuit
In early August, Coinbase made a move and filed a motion for dismissal of the lawsuit filed against it by the regulatory agency. Coinbase accused the SEC of violating the legal process and disregarding its previous interpretations of securities laws, claiming that the agency contradicted itself.
Coinbase’s Chief Legal Officer (CLO), Paul Grewal, stated that the SEC had clearly exceeded the boundaries based on its fundamental authority established by Congress, ignoring past examples. Grewal pointed out that the sale of assets, using XRP as an example, was being portrayed as a security. In response to Coinbase’s motion to dismiss the lawsuit, the SEC requested the court to deny the request.
Interestingly, Ripple’s General Counsel, Stuart Alderoty, found this move baseless. On the other hand, Deaton also noted that if the lawsuit is dismissed, the SEC still has a chance of winning.
