The global crypto industry is trading in volatility as regulators are still looking to provide clarity over it. In the meantime, lawyer John Deaton, Amicus Curies in SEC vs Ripple Case has laid down the pattern US SEC is following to win the lawsuits against firms.
Is SEC following a pattern?
John Deaton in a Twitter thread explained the SEC’s complete pattern of investigation and suing the firms. He called it SEC Modus Operandi.
He highlighted that Brad Garlinghouse, Ripple CEO said that they will be spending around $100 million on legal fees. While LBRY Jeremy Kaufman has spent one third of their fund on legal fees.
However, Dragonchain went on to spend $2-$4 million in legal fees before the case. Now, the firm is facing a long and expensive legal battle against the SEC.
XRP lawyer highlighted that he was critical of BlockFi’s extortion payment to the SEC Chair. He brought up that Zac Prince agreed to pay $100 million for pre suit settlement. While Ripple was investigated by the commission for 30 months that too before the filing was filed.
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He informed that Ripple offered to settle however the SEC refused to do it.
Watchdog makes defendants tap out
Deaton said that LBRY was investigated for around 3 years before filing of the lawsuit and no fraud. Meanwhile, LBRY offered to settle the dispute. This offer included dissolving the Corporation and selling the founder’s assets at auction. He added that anything short of registering LBC as a security but the SEC also refused.
Now, after almost 4 years and after being informed that the Commission inquiry was over. However, No fraud was found and the SEC decides to close the case. Meanwhile, they went on to file a lawsuit against DragonChian with a claim that all DRGNs are securities.
He suggested that the commission investigate the target for years causing them millions in legal fees. After this, they sue them when firms are left with limited resources.
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