Crypto lawyer John Deaton has praised Ripple's executives for resisting pressure from the US Securities and Exchange Commission (SEC) during their prolonged litigation. According to Deaton, 75,000 XRP holders played a crucial role in helping Ripple leaders Brad Garlinghouse and Chris Larsen make their decision.
Deaton noted that Ripple considered closing down before choosing a costly legal defense that preserved hundreds of jobs. The case ultimately ended with a mixed ruling, including a $125 million penalty, an injunction, and dismissed appeals.
Deaton also accused SEC lawyers of using 'intimidation tactics' to force a deal, citing the agency's attempts to obtain years of personal financial records from Garlinghouse and Larsen. A magistrate judge blocked these subpoenas in 2021, finding that the regulator had not shown the records were relevant.
The Ripple lawsuit produced a divided result, with Judge Analisa Torres ruling that programmatic XRP sales on public exchanges did not qualify as securities transactions under the facts presented. However, institutional sales were found to violate federal securities law.