- The SEC’s dismissal of the $50 million fraud lawsuit against Debt Box has triggered criticism from pro-XRP attorneys, notably John Deaton, who represents 75,000 XRP holders.
- Deaton and other lawyers lambasted SEC Chair Gary Gensler for what they perceive as unethical conduct, alleging false statements in court and a retreat to avoid potential sanctions and penalties.
In a surprising turn of events, the U.S. Securities and Exchange Commission (SEC) recently decided to dismiss the controversial $50 million fraud lawsuit against crypto firm Debt Box. This move has not only raised eyebrows within the crypto community but has also triggered a wave of criticism from pro-XRP attorneys, most notably John Deaton, who represents a staggering 75,000 XRP holders.
SEC’s About-Face Sparks Outcry from XRP Advocates
The SEC’s dismissal of the Debt Box case comes in the wake of Judge Robert Shelby’s show cause order and potential penalties for the regulatory body’s alleged false statements in federal court. The SEC admitted to misleading the court to secure a restraining order and asset freeze against Debt Box, a move that has not been taken lightly by the crypto community.
John Deaton did not mince words in his critique of SEC Chair Gary Gensler, accusing the regulatory body of lacking faithful allegiance to the law. Deaton slammed Gensler for what he deemed a disgrace under his leadership, pointing out the SEC’s lawyers’ apparent disregard for truth and justice in recent complaints against various companies.
Attorneys Unite Against SEC’s Unethical Conduct
The SEC’s credibility has taken a significant hit, drawing criticism from multiple federal judges, including Judge Torres, who described SEC lawyers as hypocrites in the Ripple lawsuit. Even in the Grayscale case, an Appellate Court ruled that the SEC’s denial of a spot Bitcoin ETF was arbitrary and capricious.
In a scathing statement, Deaton expressed his disbelief at the SEC’s attempts to avoid potential sanctions and penalties, stating, “Now, you run away, attempting to shield your unethical lawyers from facing the very law they swore to uphold.”
"I'm sorry, so sorry— paulgrewal.eth (@iampaulgrewal) January 30, 2024
How long must you punish me?
Why can't we just move on?
Let bygones be bygones
But you never will
What's the difference
If this time I'm the one that did the wrong?
Should it matter?"
Dolly Parton, "Bygones." And the SEC in its sur-reply in Debt Box. pic.twitter.com/eS6ZStxp2A
Other prominent attorneys, such as Jeremy Hogan and Bill Morgan, echoed Deaton’s sentiments, accusing the SEC of dismissing a multi-million dollar fraud lawsuit to save face and escape potential fines. This move has ignited further backlash against the SEC, with XRP attorneys condemning the regulator’s irrational lawsuits against various crypto companies, including Ripple, Binance, and Coinbase.
Coinbase CLO and Ripple CTO Join the Chorus of Criticism
Coinbase Chief Legal Officer Paul Grewal didn’t hold back in blasting the SEC for causing embarrassment by abruptly pulling a lawsuit. Meanwhile, Ripple Chief Technology Officer David Schwartz condemned the SEC’s alleged misconduct in the Debt Box case, accusing the commission of misrepresenting facts to secure orders without giving the opposing party a fair chance to defend itself.
As the crypto community digests this latest development, the SEC finds itself in the crosshairs of not only legal scrutiny but also a barrage of criticism from lawyers and industry leaders alike. The dismissal of the Debt Box case serves as a stark reminder of the challenges and controversies surrounding the regulatory landscape for digital assets.