John Deaton, a prominent legal advocate for XRP, has stirred the cryptocurrency community with his belief that the U.S. Securities and Exchange Commission (SEC) is on the brink of suffering a significant legal setback, this time in its ongoing legal battle with Coinbase, a major cryptocurrency exchange.
Deaton’s comments came as a response to a post by Coinbase’s Chief Legal Officer, Paul Grewal, who expressed frustration with the SEC’s recent filing in the case. Grewal pointed out what he saw as a lack of legal citations in the SEC’s opposition and challenged the regulator’s claims.
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Before the SEC filed its opposition to Coinbase’s Motion to Dismiss, I placed the odds of Coinbase winning at 40% – an extraordinarily high percentage for victory on a Motion to Dismiss. Normally, the odds would be no higher than 10%. After reading the SEC Opposition, the odds… https://t.co/3iTc6uD1lT
— John E Deaton (@JohnEDeaton1) October 4, 2023
He argued that the assets listed on Coinbase’s platform do not fall under the SEC’s jurisdiction, citing recent court decisions that support this position. Grewal even drew a provocative analogy, suggesting that the SEC’s arguments, if applied consistently, would classify items like Pokemon cards, stamps, and Swiftie bracelets as securities, a perspective at odds with existing laws.
The SEC’s opposition to Coinbase’s motion to dismiss the case was posted on a popular crypto forum, X. Deaton shared his belief that Coinbase stands a substantial 50% chance of winning its motion to dismiss, a surprisingly high probability for such a legal manoeuvre, which typically faces odds of no more than 10%.
Previously, before the SEC filed its motion, Deaton had estimated Coinbase’s chances of having the case dismissed at 40%, a figure he already considered unusually high. However, after reviewing the SEC’s opposition, he stated, “After reading the SEC Opposition, the odds have improved in Coinbase’s favour and stand, at least, at 50%.” Deaton attributes this shift in his opinion to what he perceives as a deficiency in the SEC’s argument, particularly in terms of the law.
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Drawing parallels to his earlier predictions in the XRP lawsuit, Deaton recalled his confident stance during a live TV appearance, where he predicted a favourable outcome for Ripple. He also foresaw Judge Analisa Torres denying the SEC’s request for an interlocutory appeal. Nevertheless, Deaton cautioned that the Coinbase case is more unpredictable, given the complexities of the legal landscape and the evolving nature of cryptocurrency regulations.
The crypto community is now eagerly watching the legal developments between Coinbase and the SEC, as Deaton’s perspective adds another layer of intrigue to this high-stakes showdown, which could have far-reaching implications for the cryptocurrency industry.