CryptoLaw founder and blockchain enthusiast John Deaton predicts the SEC will be denied summary judgment on whether Ripple CEO, Brad Garlinghouse and co-founder Chris Larsen were reckless in not knowing XRP was a security.
The SEC will be denied summary judgment on whether @bgarlinghouse and @chrislarsensf were reckless in not knowing #XRP was a security. The fact that BG met 3X w/the SEC and never once did they say “XRP is a security” is evidence a reasonable jury could conclude he wasn’t reckless https://t.co/X6cQIYWJsc
— John E Deaton (@JohnEDeaton1) January 18, 2023
His belief stems from one key fact: Ripple CEO Brad Garlinghouse met three times with the SEC, and never once did they mention “XRP is a security.”
“The fact that BG (Brad Garlinghouse) met 3X with the SEC and never once did they say ‘XRP is a security’ is evidence a reasonable jury could conclude he wasn’t reckless,” Deaton stated.
In December 2020, the SEC filed a lawsuit against Ripple and two of its executives: CEO Bradley Garlinghouse and co-founder Christian Larsen.
The SEC alleges that the Ripple executives recklessly disregarded the facts, which “allegedly made XRP amount to the unregistered sale of securities.”
As reported by U.Today, Deaton dissected the facts in support of the idea that the Ripple executives were not reckless, as claimed by the SEC.
In a long line of tweets, he presented some facts, among which are: in 2013, Ripple co-founder Chris Larsen gave a presentation to the SEC, CFTC and other agencies about Ripple’s plans to disrupt the global payment system by utilizing XRP. Then, in 2014 and 2015, the USGAO classified XRP as a “virtual currency,” along with FinCEN and the DOJ.
He claims that if anyone is granted summary judgment in the case, it would be the Ripple executives because no reasonable jury would conclude that they were reckless.
He, however, believes the lawsuit against the Ripple executives is likely to be decided at trial. In March 2022, the individual defendants’ motion to have the lawsuit against them dismissed was denied.