Attorney John Deaton: “If XRP was a security, the SEC would prohibit its sale”

The lawyer suggested that the former CTO of Ripple be included in the regulator’s suit for the sale of XRP if Ripple really violated securities law.

Former Ripple Labs co-founder Jed McCaleb just recently completed a crypto asset sale in XRP. Attorney attorney John E Deaton, representing more than 68,000 XRP holders, said that if the US Securities and Exchange Commission (SEC) accuses Ripple of conducting an illegal ICO in 2013, then the agency should take legal action trial and McCaleb.

Deaton explained that the amount McCaleb made from selling XRP is much more than the $1.3 billion raised by Ripple CEOs Chris Larsen and Brad Garlinghouse.

“The SEC maintains that XRP is considered a security, so anyone who sells it is violating Section 5 of the US Securities Act. If it were truly illegal, the SEC would not allow the defendants to continue breaking the law by selling XRP to cover company expenses, including legal fees. In this case, a written warning would have been sent to McCaleb to stop selling XRP,” Deaton tweeted.

Recall that the former CTO of Ripple received a gift of 9.5 billion XRP for his contribution to the development of the project. After McCaleb left Ripple, the SEC filed a lawsuit against the company at the end of 2020. However, even after the lawsuit with the regulator began, McCaleb quietly sold XRP to investors. So, in January 2021, he sold 28.6 million XRP worth $8.78 million. Deaton noted that the point of his statements is not to draw the attention of the SEC to the former head of Ripple. He just wanted to highlight the inconsistency of the SEC claims.

Recently, Garlinghouse once again criticized the department for its unwillingness to clarify the rules of operation for cryptocurrency companies. He believes that only the US Congress can influence the SEC’s approach to regulating crypto assets.