Ripple-SEC Lawsuit Ends, But XRP Drama Erupts Over “Security” Claims

The post Ripple-SEC Lawsuit Ends, But XRP Drama Erupts Over “Security” Claims appeared first on Coinpedia Fintech News

Ripple Labs and the SEC filed a joint stipulation of dismissal for their appeals, bringing the five-year SEC vs. Ripple case to a close. This agreement leaves in place the 2023 ruling that XRP secondary market sales aren’t securities, but maintains Ripple’s liability for institutional sales. Each side will bear its legal costs.

However, the fresh controversy still follows after Amanda Fischer, a former SEC attorney, made comments downplaying claims that the SEC had ever argued XRP itself was a security.

Her stance quickly sparked pushback from pro-XRP voices, including attorney John E. Deaton , who represented over 75,000 XRP holders in the Ripple vs SEC lawsuit. Following the news, XRP surged over 12%, reflecting renewed bullish sentiment.

Why Deaton Stepped In

Deaton said he would never have intervened in the Ripple vs SEC case if the SEC had not directly claimed XRP was a security. He pointed to the SEC’s own filings, specifically page 24 of its response to his motion to intervene, where lead prosecutor Jorge Tenreiro argued that secondary sales of XRP also constituted securities transactions. The SEC claimed:

“The XRP traded, even in the secondary market, is the embodiment of those facts, circumstances, promises, and expectations, and today represents that investment contract.”

Deaton argued that this effectively meant the token itself was a security, a position he claims was never supported by legal precedent. He credited attorney Lewis Cohen with coining the term “embodiment theory” to describe the SEC’s stance.

Judge’s Pushback on the SEC’s Theory

Even the presiding judge appeared skeptical. Deaton recalled how the court challenged the SEC’s argument, noting that under its theory, “every individual in the world who is selling XRP” could be violating securities law. This, Deaton suggested, showed the overreach in the agency’s reasoning.

Adding weight to his point, Deaton cited an interview with SEC Commissioner Hester Peirce by Thinking Crypto, where she admitted the SEC was targeting the token itself, not just how it was sold. Deaton said this made Fischer’s denial even more misleading.

Questioning the Source

Deaton ended his argument by questioning Fischer’s credibility, pointing to her track record at the SEC. He noted that Judge Netburn had accused certain SEC lawyers, including Fischer, of lacking “faithful allegiance to the law” and being “arbitrary and capricious.”

He also reminded followers that SEC attorneys had been sanctioned by a federal judge for “perpetuating a fraud upon the Court.” For Deaton, this history means that Fischer’s dismissal of the SEC’s original XRP argument should be taken with caution.

Market Stays Hot on Ripple Speculation

Beyond legal resolution, a rumor surfaced that Ripple may acquire Fortress Trust, fueling intrigue about institutional expansion. Although unconfirmed, the speculation triggered volatility as XRP briefly dipped over 6% before rebounding.

Additionally, Ripple may have paused this month’s escrow release, a rare move that triggered a 4% price gain. Still, whales continue to offload XRP, signaling cautious optimism at best.