By Bitcoinist - 3 months ago - Reading Time: 3 minutes
Pro-XRP Lawyer Deaton Optimistic About Coinbase’s Odds in Today’s SEC Clash
The US Securities and Exchange Commission (SEC) and Coinbase will face off in federal court today, and according to pro-XRP lawyer John Deaton, the odds are in the crypto exchange’s favor. Coinbase is challenging the SEC’s claims that it has been trading unregistered securities. The outcome of today’s hearing could significantly influence the regulatory landscape for cryptocurrencies in the United States.
The hearing on Coinbase’s Motion for Judgment on the Pleadings is scheduled for 10 am EST, Wednesday, January 17, before Judge Katherine Polk Failla at the US District Court for the Southern District of New York (SDNY). This motion, often seen as a longshot in enforcement cases, typically favors the government. However, the four-hour duration set for oral arguments indicates Judge Failla’s thorough consideration of the matter.
Judge Failla’s upcoming decision could either echo the stance of fellow SDNY Judge Analisa Torres, who found flaws in the SEC’s argument against Ripple regarding XRP as a security, or align with Judge Jed Rakoff, who recently ruled in favor of the SEC in its action against Terraform Labs.
In a notable precedent, Judge Failla previously dismissed a class-action lawsuit against Uniswap, differentiating Ethereum (ETH) and Bitcoin (BTC) as “crypto commodities,” which could suggest a more nuanced understanding of the crypto space.
Pro-XRP Lawyer Addresses Today’s SEC Vs. Coinbase Clash
John E Deaton, a lawyer known for representing 75,000 XRP holders in the Ripple case, conveyed a cautiously optimistic stance regarding Coinbase’s prospects. Articulating his thoughts on X (formerly known as Twitter), Deaton remarked, “Normally, I would say a MTD [motion to dismiss] at this stage would have less than a 5% chance. I’m not saying Coinbase is going to win, but I believe this MTD has more teeth to it than the usual one.”
Deaton anticipates Judge Failla will pose challenging questions to the SEC, hinting at a potential critical assessment of the SEC’s conduct. Corroborating Deaton’s viewpoint, James “MetaLawMan” Murphy from Ludlow Street Advisors underscored the depth of scrutiny that Judge Failla is anticipated to apply to the SEC’s legal arguments.
Murphy referred to a notable exchange from the pre-motion conference, wherein Judge Failla probed the SEC’s clarity in differentiating securities from non-securities in the realm of crypto assets. This exchange highlighted the judge’s critical stance on the SEC’s guidance—or lack thereof—on how certain crypto assets may or may not be implicated by securities laws.
The pro-XRP attorney also praised the caliber of Coinbase’s legal team and expressed his anticipation of their performance in court. He noted, “I predict the Coinbase legal team will be outstanding,” adding “ I represent over 5K Coinbase customers, as potential amici curiae, I’ll be sitting in the courtroom opposing the SEC’s gross overreach in spirit – and on behalf of those customers.”
4 Potential Outcomes
Murphy delineated four scenarios that could potentially emerge from the hearing today. The first scenario involves the denial of Coinbase’s motion, which would allow the case to advance to the discovery phase.
The second scenario entails the granting of the motion “with prejudice,” leading to the outright dismissal of the case at the district court level and potentially setting the stage for an appeal by the SEC. The third scenario involves the court granting the motion “without prejudice,” providing the SEC with an opportunity to rectify any deficiencies in their complaint, although this might prove futile if the court rules that the SEC lacks congressional authority to regulate crypto exchanges.
Lastly, the fourth scenario could see the court partially granting the motion, thereby narrowing the focus of the case exclusively to the staking service and its qualification as an investment contract.
At press time, COIN traded at $133.88.
Original source: Bitcoinist