XRP holders helped Ripple resist SEC pressure, Deaton says

John Deaton has credited 75,000 XRP holders with helping Ripple executives resist pressure during the company’s legal fight with the U.S. Securities and Exchange Commission

Summary

• Deaton says 75,000 XRP holders helped Ripple’s leaders resist SEC pressure during the prolonged litigation.
• Ripple considered closing before executives chose a costly legal defense that preserved hundreds of jobs.
• The case ended with a mixed ruling, $125 million penalty, injunction, and dismissed appeals final.

In a July 12 post, the crypto lawyer praised chief executive Brad Garlinghouse and executive chairman Chris Larsen for refusing to settle early. He also accused SEC lawyers of using tactics to force a deal. His comments followed Garlinghouse’s account that Ripple considered closing after the agency filed its complaint in December 2020.

Deaton responded to comments from Ripple co-founder David Schwartz, who said outside lawyers once viewed the company as “unsavable.” Schwartz suggested that naming Garlinghouse and Larsen personally may have encouraged them to protect themselves through separate settlements

David @JoelKatz is 100% on 🎯

Previous to the @Ripple lawsuit by the @SECGov, Jay Calyton was interviewed with Joe Grundfest. Jay Clayton stated that sometimes it’s smart to sue the individual executives of a company, even in non-fraud enforcement actions.

Grundfest stated… https://t.co/54XqiSeLTD

— John E Deaton (@JohnEDeaton1) July 12, 2026

That account describes internal advice and personal views. It does not establish the SEC’s motive for bringing claims against both executives. Garlinghouse has said Ripple instead spent about $150 million defending the business and protecting hundreds of jobs.

XRP holders entered the case as amici

Deaton entered the case after organizing XRP holders who opposed the SEC’s broad treatment of the token. A federal judge granted him permission to participate as an amicus, allowing him to present arguments from holders who bought or used XRP in different 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 declarations about purchase reasons and uses unrelated to investment.

As crypto.news previously reported, Ripple deputy general counsel Deborah McCrimmon later said community members supplied research and records that saved the company millions of dollars in legal costs

Deaton has also said holder declarations helped show that many buyers did not rely on Ripple’s promises. The court did not rule that the 75,000 holders alone decided the case. Their role formed one part of a larger record involving sales contracts, marketing and buyer expectations.

Court blocked the SEC’s broad records request

Deaton also returned to the SEC’s attempt to obtain years of personal financial records from Garlinghouse and Larsen. In 2021, a magistrate judge blocked subpoenas seeking broad banking information after finding that the regulator had not shown the records were relevant. The executives had already agreed to provide records tied to their XRP transactions, according to reports from the case.

His post called the requests an “intimidation tactic” and described some SEC lawyers as “ethically challenged.” Those phrases reflect Deaton’s allegations, not court findings in the Ripple action

He also referred to sanctions against the SEC in the separate Debt Box case. A Utah judge found that agency lawyers made misleading statements there, but that ruling did not decide misconduct claims in Ripple’s case.

Final judgment remains in force

The Ripple lawsuit produced a divided result. Judge Analisa Torres ruled in 2023 that Ripple’s programmatic XRP sales on public exchanges did not qualify as securities transactions under the facts presented

She ruled that institutional sales violated federal securities law. The SEC later dismissed its remaining claims against Garlinghouse and Larsen before trial, ending their personal exposure in that action.

The court imposed a $125 million civil penalty and an injunction against Ripple in 2024. Ripple and the SEC later sought a lower penalty and removal of the injunction, but Torres rejected that request

Both sides dismissed their appeals in August 2025, leaving the final judgment intact. Deaton’s description of an overall “win” therefore reflects a favorable reading of a mixed legal outcome.