John Deaton, a prominent cryptocurrency attorney, has weighed in on the ongoing legal battle between the United States Securities and Exchange Commission (SEC) and Ripple. He has argued that if Ripple manages to reach a settlement for $20 million or less, it would be considered a significant legal victory for the company.
Deaton expressed his opinion in a recent post on X (formerly Twitter) where he emphasized that the SEC vs. Ripple lawsuit is not a 50/50 scenario but rather a situation where Ripple holds a significant advantage, suggesting it’s closer to a 90/10 split in favor of Ripple.
His perspective is consistent with the sentiment prevailing in the cryptocurrency community, which generally views a potential $20 million settlement as a favorable outcome for Ripple. This assessment takes into account the broader implications of the XRP lawsuit and the regulatory landscape for digital currencies.
The people who’ve argued that the SEC got a 50-50 victory in the @Ripple case are 💯 wrong. It was more like 90-10 in Ripple’s favor. If Ripple ends up paying $20M or less it’s a 99.9% legal victory. https://t.co/Xe6SYBiTCJ
— John E Deaton (@JohnEDeaton1) November 4, 2023
Stuart Alderoty, Ripple’s Chief Legal Officer, also contributed to this narrative by highlighting another legal setback for the SEC.
In the SEC vs. Govil case, the U.S. Court of Appeals for the Second Circuit ruled that the SEC cannot seek substantial disgorgement awards without first demonstrating actual financial harm to investors. In essence, this implies that if no harm can be proven, there should be no penalty.
The legal battle between Ripple and the SEC began in December 2020 when the SEC filed a lawsuit against Ripple Labs, alleging that the company conducted an unregistered securities offering through the sale of XRP, its native cryptocurrency. Over time, a precedent was set as Judge Analisa Torres determined that XRP should not be considered a security when traded on the secondary market. Additionally, the case underwent significant developments as the charges against Ripple executives were reduced.
Most recently, Judge Torres approved an order related to the SEC and Ripple’s joint request for a briefing schedule regarding institutional sales of XRP. This pertains to the aspect of the XRP lawsuit where the company was found to have violated securities laws. The parties have been instructed to provide a joint briefing schedule by no later than November 9, indicating continued developments in the case.
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