The SEC and Ripple Labs Expected to Finalize Settlement Following Dismissal of Claims Against Executives
The US Securities and Exchange Securities Commission (SEC) and Ripple Labs are anticipated to reach a settlement after the official dismissal of the SEC’s claims against Ripple’s CEO Brad Garlinghouse and co-founder Chris Larsen. Pro-XRP legal expert John Deaton has shed light on how the settlement process will unfold.
In a post shared on his X (formerly Twitter) platform, Deaton expressed doubt that there have been any serious discussions regarding a settlement between the SEC and Ripple and its executives. He stated that the Commission is seeking a $770 million fine for Ripple’s violation of securities laws.
Deaton also noted that the penalty phase is not as straightforward as some may think. It will involve additional depositions, interrogatories, requests for the production of documents, emails, bank statements, contracts, and ODL transactions.
Ripple aims to significantly reduce the fine imposed by the SEC. To achieve this, the company plans to exclude the ODL transactions, which the SEC may argue violated securities laws.
Deaton referenced the SEC’s case against the decentralized content-sharing platform LBRY, which took eight months of additional litigation before the judge ordered a fine of $111,614. He highlighted the complexity of the case, with both parties filing multiple briefs and undergoing depositions.
Timeline and Potential Outcomes of the SEC’s Case Against Ripple
Deaton does not anticipate a final judgment from Judge Analisa Torres until late summer at the earliest. He suggests that it could take a full year before either the SEC or Ripple has the opportunity to file an appeal in the case.
Deaton also mentioned the potential impact of Coinbase’s Motion To Dismiss (MTD) on the case and a possible settlement. If Judge Failla grants the motion, the SEC may be compelled to change its stance and negotiate a settlement with Ripple.
However, if Coinbase loses its MTD, a settlement becomes less likely. Coinbase is seeking to dismiss the SEC’s case against it by arguing that the Commission lacks jurisdiction over its activities. The hearing for Coinbase’s oral argument is scheduled for January 17, 2024, with a ruling expected within 60 to 120 days afterward.
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