Another XRP lawsuit update: SEC accuses XRP Holders of ‘reciting’ Ripple’s litigation position
On the back of Judge Analisa Torres granting John Deaton’s motion to intervene on behalf of XRP holders, the plaintiffs and the defendants in the ongoing case between the United States SEC and Ripple Labs and its execs were asked to file their responses by the 3rd of May. On the back of the defendants doing so, the regulatory agency has now filed its 33-page opposition paper to the same.
As expected, the SEC’s position with respect to the XRP holders’ motion to intervene is very different from that of the defendants.
According to the regulatory agency, all the movants have done is “re-styled” its withdrawn petition of Mandamus in the form of an instant motion for intervention against the SEC. The agency’s memorandum of law went on to argue,
“Movants claim that, as secondary market XRP investors, they are somehow “unnamed defendants”— even though this particular action does not charge transactions between individuals in the secondary market as violations of Section 5.”
While Ripple and its execs in their own response to the aforementioned motion submitted that the movants be allowed to participate as amici or as intervenors with “limited participation rights,” the SEC asserted,
“Movants should not be permitted to broaden the scope of the SEC’s claims by intervening in this action in any capacity.”
Such “interference,” the SEC contended, is “constitutionally and statutorily barred,” with the agency adding that the same will also intrude on the executive branch’s “prosecutorial discretion.”
Curiously, in its opposition to the motion, the SEC also alleged that the movants have “essentially recited” the defendants’ litigation position. It added,
“Movants show that their interests (if any) are not adequately protected by Defendants given that Movants’ objectives are the same as Defendants.”
This contention of the SEC is in direct contravention with what both the defendants and the intervenors have claimed. While the latter had claimed that “XRP Holders cannot rely on the Defendants’ efforts in this case,” the former parties in their own response to the said motion 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.”
The SEC concluded its arguments by citing “practical” reasons, each of which it had only presented in its initial motion opposing the intervenors’ motion. According to the agency,
“An SEC enforcement action with thousands of individual investors intervening on both sides to advance legal and factual arguments the SEC and Defendants are capable of making would unnecessarily complicate this action, cause undue delay, require additional judicial resources, and prejudice the SEC’s efforts to enforce the federal securities laws.”
John Deaton representing XRP holders, collectively known as the Movants, now has until the 17th of May to respond to both the SEC and Ripple’s contentions.