The founder of Crypto Law, attorney John Deaton, has revealed the major fear that led him to sue the Securities and Exchange Commission (SEC).

Deaton thinks that XRP holders will suffer in the event that the judge overseeing the ongoing litigation between the SEC and Ripple rules in favor of the Fair Notice Defense after identifying XRP as a security. On the basis of such an event, he continued, he felt obliged to sue the SEC.

"Most likely now, it won’t happen, but there was a scenario where the SEC wins but Ripple doesn’t have to pay much. The judge could say XRP was and is security, but Ripple didn’t get fair notice, so it doesn’t have to pay. XRP holders get screwed. That fear was one reason I sued the SEC, " Deaton said.

The founder of Crypto Law also said that in this situation, Ripple would have insurance thanks to the Fair Notice Defense. If the blockchain corporation loses "the security" litigation, the move will be put into action.

According to Deaton, no American exchange will relist the cryptocurrency if the court concludes that XRP is a security and determines that Ripple did not receive fair notice. He worries that if such a bad thing happens, American XRP holders will sell the coin through different channels.

"First, I’m not saying it is going to happen—I don’t believe it will—I predict it won’t. But in that scenario, you would have a token deemed security with Ripple that gives you zero rights or interest in Ripple. "No exchange would relist, you would have to be a dealer broker to sell, etc.," he added.

 Deaton Fighting to Protect XRP Holders' Interest

It is important to note that Deaton has filed a lawsuit against the SEC to defend the rights of XRP holders in the Ripple litigation.

In an August tweet, Deaton asserted that XRP holders had lost $15 billion as a result of the SEC's decision to classify all XRP, including secondary market sales, as securities, as opposed to only Ripple. As a result, XRP was delisted from numerous American cryptocurrency exchanges, including Coinbase and Kraken, which put pressure on the token's price.

Oct 15, 2022
Crypto News

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