Prominent cryptocurrency attorney John E. Deaton has provided insights into the ongoing lawsuit between Ripple Labs and the Securities and Exchange Commission (SEC). Deaton argues that a potential settlement of $20 million or less would be a significant legal victory for Ripple.
Deaton took to social media to refute the idea that the lawsuit’s outcome is evenly balanced for the SEC. He asserts that it leans heavily in Ripple’s favor, with a 90-10 advantage. Deaton’s response was prompted by a post from Stuart Alderoty, Ripple’s Chief Legal Officer, highlighting another legal setback for the SEC.
The cryptocurrency community generally agrees with Deaton’s viewpoint, viewing the suggested $20 million settlement as a positive outcome for Ripple. This assessment takes into account the potential consequences of the XRP lawsuit and the broader regulatory landscape for digital currencies.
Stuart Alderoty’s post adds further context to the situation, emphasizing that the SEC has faced a series of defeats recently. In the SEC v. Govil case, the 2nd Circuit ruled that the SEC cannot request a substantial disgorgement award without demonstrating actual financial harm to investors. This ruling implies that without harm, there can be no penalty.
The SEC initiated legal action against Ripple Labs in December 2020, accusing the company of conducting an unregistered securities offering through the sale of XRP, its native cryptocurrency. A significant precedent was set when Judge Analisa Torres determined that XRP was not a security when traded on a secondary market. Additionally, the charges against Ripple executives were reduced throughout the course of the case.
Judge Torres recently approved an order regarding the SEC and Ripple’s joint request to propose a briefing schedule addressing institutional sales of XRP. This pertains to the portion of the lawsuit in which Ripple was found to have violated securities laws. The parties have been instructed to provide a joint briefing schedule by November 9.
It is worth noting that these updates and developments contribute to the broader discussions surrounding crypto regulation and the enforcement actions taken by the SEC.
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