Just over two weeks after Attorney John Deaton filed a motion to intervene on behalf of XRP holders in the ongoing case between the United States Securities and Exchange Commission and Ripple Labs, the defendants have finally filed a response to the same.
Back on the 19th of April, when Deaton had first filed the aforementioned motion, the accompanying memorandum of law had argued,
“… XRP Holders cannot rely on the Defendants’ efforts in this case.”
As expected, in their present response to the motion to intervene, Ripple Labs and execs Brad Garlinghouse and Chris Larsen have sided with the intervenors, claiming that the “movants should be allowed to participate in the case.” The defendants argued,
“As independent holders, developers, and users of XRP, with no relationship to Defendants, they have strong and distinct interests in the regulatory status of XRP. This Court’s ruling may determine those interests; at minimum, it will affect them.”
Ripple’s contentions favoring such an intervention are in line with the arguments made by Deaton on the 19th of last month, with the defendants going on to point out that the court’s decision in the present case will be greater than the impact made by the mere filing of the complaint by the SEC. The latter, the blockchain firm asserted, had contributed to the value and liquidity of XRP falling sharply in U.S markets.
The defendants also backed the movants’ assertion that the SEC’s regulatory authority in the present case rests on a foundation of “baseless contentions,” adding that yes, the agency does not represent the interests of XRP holders, despite the SEC claiming otherwise. The agency, the response went on to say, is seeking to “destroy the market and frustrate the purposes for which the movants hold XRP.”
Finally, Ripple and its execs also supported Deaton’s argument that the defendants themselves don’t represent the interests of the intervenors or other XRP holders.
“Defendants’ case will deal not only with the present status of XRP as a security, but also its past status. Movants are focused on the present-day status of XRP – which affects XRP holders’ ability to use it and innovate with it going forward – with little interest in past sales.”
Here, it’s worth noting that the defendants’ support for the movants’ motion to intervene comes with a caveat. According to the counsels for the defendants, they would support the movants’ “limited participation” in the case as either amici or as intervenors with certain limitations. However, they argued,
“Although Movants’ participation in their own names is warranted, the Court should deny Movants’ request to intervene as representatives of a putative class of additional defendants. Intervention on behalf of a class is appropriate only in exceedingly rare cases.”
Such a motion has never been approved by any court in any SEC enforcement action, the defendants concluded.
With both the plaintiffs and the defendants having filed their opposition and response papers, respectively, the movants now have until the 17th of May to file a response to the same.