Ripple Lawyer Now Wants to Defend Ethereum Against Classification as a Security

In the mammoth trial of the US Securities and Exchange Commission (SEC) against Ripple, the big issue is whether XRP should not be classified as a security and therefore fall under state regulation. The competent court in New York is working on a ruling and observers expect a signal.

However, in the meantime, the prosecutor’s office in New York has already launched the next initiative and wants to achieve in a lawsuit against the crypto exchange KuCoin that Ethereum (ETH) should also fall under the securities division. Crypto lawyer John Deaton, who already represents XRP investors, has recognized parallels and now also wants to represent investors in the Ethereum case.

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The crypto industry united against the U.S. authorities

Via Twitter, Deaton explained that ETH does not constitute a security in his view and that he wants to intervene as he did with Ripple’s XRP. To prepare a class action lawsuit, he is asking Ethereum US investors to issue mandates. Regulators (in the U.S.) are “out of control” and need to be resisted, he said. In an SEC case against cryptocurrency LBRY, Deaton had obtained on appeal that sales on secondary markets such as crypto exchanges remain non-admissible. He is likely to argue along these lines in the case of Ethereum as well, as ETH is being approached indirectly through the KuCoin crypto exchange

There had been fierce discord between Ethereum and Ripple (XRP) in August 2022, as top officials accused each other of misdirecting information on the testy topic of “security or not?” However, the increasingly sharp course of the SEC and other U.S. authorities against the crypto industry makes not only Deaton overlook old disagreements and instead emphasize necessary solidarity.

Bottom line: Ethereum under U.S. regulation would be a grim scenario

Ethereum’s price curve has so far shown itself unaffected by the new legal risks, but on the other hand, it is unable to develop its own momentum despite the upcoming major upgrade Shanghai. It is unlikely to please anyone at Ethereum to suddenly be mentioned in the same breath as Ripple and XRP because, in fact, the genesis of the two altcoins differs significantly.

ETH has also been subject to the SEC’s unofficial carte blanche granted by the infamous “Hinman speech”, which also plays a central role in the Ripple lawsuit. Attorney Deaton could, however, be right in his prediction that the different legal battlefields will influence each other.

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(Featured image by WorldSpectrum via Pixabay)

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