In a pivotal moment for the ongoing legal confrontation between Ripple and the U.S. Securities and Exchange Commission (SEC), attorney John Deaton has unveiled evidence that significantly questions the SEC's allegations against Ripple. Deaton, a distinguished figure in the realm of cryptocurrency law, has brought attention to the case of SpendTheBits, a crypto payment application developed on the XRP Ledger, which functions independently of Ripple. This discovery not only disputes the SEC's "common enterprise" argument but also bolsters Ripple's position in the lawsuit. As this legal drama continues to unfold, the implications for Ripple, the extensive XRP community, and the entire cryptocurrency sector could be profound.

In an exhilarating twist in the Ripple versus SEC legal showdown, attorney John Deaton has disclosed evidence that casts doubt on the SEC’s “common enterprise” argument. Deaton, a renowned lawyer celebrated for his expertise in the crypto domain, has been vigorously scrutinizing the SEC’s case against Ripple. His recent discovery of Jaskaran Kambo, the innovator behind SpendTheBits (STB), a cryptocurrency payment app built on the XRP Ledger, has taken many by surprise. Intriguingly, Ripple and its senior executives were reportedly oblivious to SpendTheBits and its operations.

Deaton's encounter with SpendTheBits occurred during his search for developers on the #XRPL who had neither received financial support nor any form of assistance from @Ripple. He believes that Ripple, @bgarlinghouse, and @chrislarsensf were completely unaware of @Jay_SpendDBits and his STB application. This revelation came to light when STB filed an amicus brief in support of Ripple, challenging the SEC’s “common enterprise” argument.

What makes SpendTheBits' involvement noteworthy is its decision to file a document known as an amicus curiae brief to back Ripple in the lawsuit. Deaton posits that this brief significantly weakens the SEC’s “common enterprise” argument. He suggests that the judge might even reference SpendTheBits’ brief when rendering a decision. Furthermore, Deaton believes that the amicus briefs filed by SpendTheBits and TapJets will undercut the SEC’s argument, given that these developers did not receive any financial or technical support from Ripple.

“I think SpendTheBits and TapJets are the prime examples that challenge the SEC’s common enterprise argument,” Deaton remarked.

Delving deeper into the SEC’s contradictory claims reveals a tangled web of logic. Initially, the SEC contended that Ripple itself constituted a common enterprise. However, Ripple’s legal team successfully demonstrated that XRP holders did not profit merely by possessing the cryptocurrency, leading the SEC to abandon this argument. Subsequently, the SEC shifted its stance, arguing that the entire XRP ecosystem—including all XRP holders, exchanges, and vendors—should be regarded as a common enterprise. To bolster this claim, they introduced an “expert” witness who alleged that XRP holders depended on Ripple for profits. Yet, this testimony was dismissed by the judge when Ripple presented 3,000 statements from XRP holders to the contrary.

Now, the SEC posits that XRP itself is the common enterprise, a strategy that Deaton describes as a “schizophrenic defense.” This evidence, brought forth by attorney John Deaton, challenges the SEC’s case against Ripple. As the legal battle progresses, its outcome is poised to significantly impact Ripple, the XRP cryptocurrency, and the crypto industry at large. Stay tuned for further updates on this critical lawsuit.