- John Deaton, a well-known lawyer advocating for XRP investors, has provided an expert analysis on the expected timeline and settlement possibilities in the ongoing Ripple-SEC case.
- Deaton emphasizes the complexity of the penalty phase and draws parallels from the LBRY case, predicting a prolonged legal battle ahead.
Decoding the Legal Complexity: Ripple vs. SEC
John Deaton, a prominent attorney championing the rights of XRP investors, has recently shared his insights on the drawn-out legal tussle between Ripple and the U.S. Securities and Exchange Commission (SEC). Utilizing his platform on X (formerly known as Twitter), Deaton projected a prolonged timeline for the case’s resolution, highlighting the slim chances of a settlement between the involved parties.
“Ripple, Brad Garlinghouse, Chris Larsen, and the SEC haven’t engaged in any meaningful settlement talks. The SEC is both angered and embarrassed, seeking a staggering $770 million,”
Deaton remarked. He delved deeper, illustrating the exhaustive nature of the penalty phase,
“This phase is akin to a second lawsuit, necessitating additional depositions, interrogatories, document production requests, including emails, bank records, contracts, and ODL transactions.”
Navigating Through the Legal Maze: What to Expect
In the bid to reduce the hefty $770 million penalty, Ripple is expected to strategize effectively, possibly by excluding On-Demand Liquidity (ODL) transactions and mitigating other related costs. Deaton drew attention to the LBRY case, stating,
“The SEC demanded $23 million from LBRY. Yet, after eight additional months of litigation, the judge imposed a mere $130,000 fine.”
Using this case as a benchmark, he anticipated,
“I foresee a final judgment from Judge Torres not before the late summer, possibly extending to a full year before an appeal is lodged in this case.”
He also linked Ripple’s fate to another significant legal battle involving Coinbase, suggesting that a victory for Coinbase could potentially influence the SEC to reassess its stance and explore a settlement with Ripple.
The oral arguments in the Coinbase motion are scheduled for January 17, 2024, with a decision expected to follow within 60 to 120 days, aligning with Deaton’s end-of-summer prediction and potentially influencing the Ripple-SEC case’s timeline.
XRP’s Legal Standing: A Nuanced Perspective
Discussing the penalties, Deaton expressed confidence in Ripple‘s ability to negotiate the amount down.
“This is not a fraud case. The objective is determining an apt penalty for Ripple’s involvement in transactions deemed as sales of unregistered securities, conducted in the milieu of a new asset class recognized as ‘virtual currencies’ by other federal agencies,”
Deaton also delved into Ripple‘s proactive interactions with various U.S. regulatory bodies since 2013, highlighting its recognition as a “convertible virtual currency” by FinCEN and the DOJ in 2015. Furthermore, he underscored that on the eve of the famed “Hinman speech” in 2018, SEC enforcement attorneys did not classify XRP as a security nor recommend enforcement action against Ripple.
“SEC lawyers were even allowed to own and trade XRP up until 2019. With these facts at hand, I don’t believe Judge Torres will impose undue hardship on Ripple,”
At the time of writing, XRP is trading at $0.5528, awaiting the unfolding of these legal developments.
Connect with Collin Brown on X (Twitter) for valuable market insights, frequent updates, and a touch of humor!