Lawyer John E. Deaton filed a petition to intervene as third-party defendants in the case Ripple is currently facing on behalf of 10,000 XRP holders.
To clarify why the motion was filed, Deaton said, “Ripple, Larsen, and Garlinghouse are focused on protecting their rights against the SEC’s assault, and the $1.3 billion in damages the agency has demanded from them.” It is not their responsibility to protect my or other XRP holders’ interests. We didn’t buy XRP from them, and we didn’t take into account Ripple’s success as a business when we did. It is up to us to protect ourselves against the Securities and Exchange Commission.”
The SEC opposes the motion of XRP owner.
The SEC has filed an appeal with US District Judge Analisa Torres, stating that this level of interference could prompt other XRP holders, including investors who have previously sued Ripple, to enter the case.
This would cause “incalculable uncertainty, add unmanageable difficulty, and bring this Court’s investigation and administration of the underlying acts to a halt,” according to the department. In their message, the SEC also stated:
“It would be logic-bound to allow both investors and interested members of the public with varying views to interfere in the underlying conduct,’ causing a ‘avalanche’ of lawsuits and ‘near-certainty of unreasonable delay, uncertainty, and confusion…” if the Court allowed Movants to intervene.
XRP holders, according to Ripple, should be included in the event.
Although the SEC has expressed opposition to the motion, Ripple has stated that XRP holders should join the lawsuit. The uncertainty created by the SEC’s amended complaint was cited by Ripple’s legal team as an excuse. According to the lawyers, the amended lawsuit further muddles the concept of XRP and how the SEC plans to define the digital asset, placing investors at risk. Ripple wrote to District Judge Analisa Torres in an official letter:
“Intervenors are right that the SEC’s amended complaint does not clarify whether the SEC has claimed and will seek to establish in this litigation that XRP is an investment contract per se, and therefore a defense per se, or whether the SEC has alleged and will seek to establish in this litigation that Defendants’ sales of XRP resulted in an investment contract based on the circumstances of those sales.”
“Given this uncertainty and the possible effect of this case on non-parties,” the Ripple lawyers continued, “Defendants accept that Intervenors should be allowed to proceed with their motion to clarify this point.”
The SEC’s motion to inspect Ripple CEO Brad Garlinghouse and Ripple co-founder Chris Larsen’s personal financial records; the SEC’s motion to dismiss Ripple’s “fair notice” defense; Ripple’s motion to obtain documents from the SEC to justify how the agency classifies Bitcoin and Ether; and Garlinghouse and Larsen’s motions to dismiss the individuation charges.