The ongoing legal battle between the United States Securities and Exchange Commission (SEC) and Ripple Labs has captured the attention of the cryptocurrency community and legal experts alike. Recently, the prominent cryptocurrency attorney John Deaton weighed in on the matter, offering insights into what he believes constitutes a significant legal triumph for Ripple. Deaton’s viewpoint has sparked considerable interest, as he suggests that a $20 million settlement or less would represent a remarkable victory for the company.
Debunking the 50/50 Notion
In a recent post on social media platform X (formerly Twitter), Deaton emphatically refuted the idea that the lawsuit’s outcome was evenly balanced between the SEC and Ripple. Instead, he claimed that the odds are more heavily skewed in favor of Ripple, with a 90/10 advantage. This perspective stems from Deaton’s analysis of the recent developments in the case, including the SEC’s series of setbacks.
Stuart Alderoty, Ripple’s chief legal officer, has added to the narrative by underscoring the SEC’s recent legal defeats. Alderoty points to a recent ruling in the case of the SEC vs. Govil, where the U.S. Court of Appeals for the Second Circuit emphasized that the SEC cannot demand significant disgorgement awards without first demonstrating actual financial harm to investors. In essence, this ruling implies that without harm, there can be no penalty. These legal setbacks further bolster Deaton’s argument regarding Ripple’s advantageous position in the ongoing litigation.
Background of the SEC vs. Ripple Lawsuit
The SEC initiated legal action against Ripple Labs in December 2020, alleging that the company had conducted an unregistered securities offering by selling XRP, its native cryptocurrency. The legal proceedings have undergone significant changes since then, with Judge Analisa Torres determining that XRP is not a security when traded on the secondary market. Additionally, charges against Ripple executives were reduced during the course of the lawsuit.
In a recent development, Judge Torres approved an order related to the SEC and Ripple’s joint request to propose a briefing schedule regarding institutional sales of XRP. This particular aspect of the lawsuit revolves around the company’s alleged breach of securities laws. Both parties have been instructed to provide a joint briefing schedule no later than November 9.
John Deaton’s perspective and the recent legal setbacks faced by the SEC have brought renewed hope to the Ripple community. A $20 million settlement, as suggested by Deaton, could indeed represent a substantial legal victory for Ripple, with implications that extend beyond this high-profile case to the broader regulatory landscape of digital currencies. The crypto world continues to watch closely as this legal drama unfolds, and the final resolution could have far-reaching consequences for the industry.