Prominent attorney John Deaton has shared his thoughts on the ongoing legal battle between Ripple and the US Securities and Exchange Commission (SEC). Deaton believes that it will take a long time before a final judgment is reached and thinks that a settlement is unlikely.
“I do not believe there has been a single serious conversation regarding settlement between Ripple, Brad Garlinghouse, Chris Larsen and the SEC. The SEC is pissed and embarrassed and wants $770M worth of flesh,” Deaton stated. He emphasized that the penalty phase of the case will require a thorough examination of various documents and transactions.
In terms of the projected timeline for the Ripple-SEC litigation, Deaton referred to a previous case involving LBRY where additional litigation extended the process by eight months. Drawing from this, he expects a final judgment to be issued by Judge Torres no earlier than late summer, and it may take a full year before an appeal is filed.
Deaton also linked the outcome of Ripple’s case to another key lawsuit involving Coinbase. If Coinbase wins their motion to dismiss, Deaton believes that the SEC will have to change its approach and potentially seek a settlement with Ripple. However, if Coinbase loses their motion, Deaton predicts that no settlement will be reached.
Regarding the nature of the penalties, Deaton expressed confidence in Ripple’s efforts to reduce the amount. He clarified that this is not a fraud case but rather an attempt to impose an appropriate fine for the sale of unregistered securities within the context of a new asset that other federal agencies have recognized as “virtual currencies.”
Deaton also highlighted Ripple’s proactive engagement with various US financial regulators since 2013 and the recognition of XRP as a “convertible virtual currency” by FinCEN and the DOJ in 2015. He noted that SEC enforcement lawyers had analyzed XRP’s status under the Howey Test in 2018 and did not recommend that Ripple cease selling XRP or take enforcement action, indicating that they couldn’t determine it was a security.
In conclusion, Deaton emphasized the need for a nuanced understanding of the case and expressed his belief that Judge Torres will consider the facts without any bias against Ripple.
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About the author - J-S Tremblay
I've been involved in the cryptocurrency world since 2016 and trading since 2019. I started Moon and Lambo in 2021. I'm passionate about crypto and love to share my knowledge. I hate bankers and I hope that cryptocurrency will change the financial world for the better. View full profile...
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