John Deaton credited 75,000 XRP holders with helping Ripple executives withstand pressure during the company’s legal battle with the US Securities and Exchange Commission.
Summary
- Deaton says 75,000 XRP holders helped Ripple leaders resist SEC pressure during the long litigation.
- Ripple considered closing before management opted for a costly legal defense that saved hundreds of jobs.
- The case ended in a mixed verdict, a $125 million fine, an injunction, and the final appeals dismissed.
In a July 12 post, the crypto advocate praised CEO Brad Garlinghouse and executive chairman Chris Larsen for refusing to settle early. He also accused SEC lawyers of using tactics to force the deal. His comments followed the Garlinghouse account Ripple considered closing after the agency filed its complaint in December 2020.
Deaton responded to comments from Ripple founder David Schwartz, who said outside lawyers once considered the company “unsalvageable.” Schwartz suggested that naming Garlinghouse and Larsen personally might encourage them to defend themselves by living in separate locations.
That account describes insider advice and personal opinions. It does not confirm the SEC’s motive for bringing claims against both executives. Garlinghouse said Ripple instead spent about $150 million protecting the business and protecting hundreds of jobs.
XRP owners filed suit as amici
Deaton entered the lawsuit after organizing XRP holders who protested the SEC’s extensive handling of the token. A federal judge granted him permission to participate as amicus, allowing him to present arguments from owners who have bought or used XRP in various ways.
His group argued that secondary market transactions should not automatically receive the same legal treatment as Ripple’s institutional sales. The group also submitted announcements regarding the reasons for purchases and non-investment related spending.
As crypto.news previously reported, Ripple’s deputy general counsel Deborah McCrimmon later said that members of the public who provided research and records saved the company millions of dollars in legal fees.
Deaton also said the owner’s announcements helped show that many consumers didn’t trust Ripple’s promises. The court did not decide that the 75,000 owners alone decided the case. Their role forms one part of a larger record that includes sales contracts, marketing and customer expectations.
The court blocked the SEC’s extensive records request
Deaton also returned to the SEC’s effort to obtain years of financial records from Garlinghouse and Larsen. In 2021, a magistrate judge blocked subpoenas seeking more bank information after finding that the regulator had not shown the records were relevant. The executives had already agreed to hand over records related to their XRP transactions, according to reports from the lawsuit.
His post called the requests an “intimidation tactic” and described some SEC attorneys as “legally challenged.” Those phrases reflect Deaton’s allegations, not the court’s findings in the Ripple action.
He also talked about the penalties against the SEC in a separate Credit Box case. A Utah judge found that the agency’s lawyers made misleading statements there, but that ruling did not decide the misconduct claims in Ripple’s case.
The final judgment is still in effect
The Ripple case produced a mixed result. Judge Analisa Torres ruled in 2023 that Ripple’s planned sale of XRP on public exchanges did not qualify as securities transactions under the facts presented.
He ruled that the agency’s sales violated federal securities laws. The SEC later dismissed its remaining claims against Garlinghouse and Larsen before trial, ending their exposure to the action.
The court imposed a civil penalty of $125 million and a penalty against Ripple in 2024. Ripple and the SEC later sought a lower fine and vacated sentence, but Torres rejected that request.
Both sides dismissed their appeals in August 2025, leaving the final decision intact. Deaton’s definition of all “victory” therefore reflects a good reading of mixed legal effect.
