In an interview with the Securities and Exchange Commission (SEC), renowned cryptocurrency attorney John E. Deaton discussed his thoughts on Ripple Lab’s ongoing XRP litigation and stated that he thinks any settlement of $20 million or less will constitute a significant legal win for the business.
Deaton’s Viewpoint in the XRP Legal Case
Deaton recently expressed his strong disagreement with the idea that the litigation resulted in a 50-50 win for the SEC in a post on the social media site X, stating that the verdict was actually closer to 90-10 in Ripple’s favor. Deaton’s remarks are in reaction to a post that highlights yet another legal loss for the SEC and was made by Stuart Alderoty, Chief Legal Officer of Ripple.
“The people who’ve argued that the SEC got a 50-50 victory in the Ripple case are 100% wrong,” Deaton wrote in his piece. More like 90-10 was in Ripple’s advantage. Legally, Ripple is winning 99.9% of the cases if they pay $20 million or less.
Deaton’s viewpoint is in line with the general consensus in the cryptocurrency industry, which believes that Ripple would benefit from the proposed $20 million settlement given the possible ramifications of the XRP litigation and the regulatory environment that surrounds cryptocurrencies in general.
The story is furthered by Stuart Alderoty’s piece, in which he mentions that the SEC lost this week in order to keep their winning streak going. According to Alderoty, “the SEC cannot request a crippling disgorgement award in SEC v. Govil, as per the ruling of the 2d Circuit without first demonstrating that “investors” have experienced financial loss. Stated differently, no foul, no harm.
The Legal Battle of Ripple
In December 2020, Ripple Labs was sued by the SEC, claiming that the company had sold its native cryptocurrency, XRP, through an unregistered securities offering.
The lawsuit contended that Ripple ought to have registered its token sales with the SEC and that XRP ought to be categorized as a securities. The possibility of this case creating a precedent for digital asset regulation in the US caused tremors in the cryptocurrency market.
Judge Analisa Torres’ decision to uphold the asset’s status as a non-security when it was exchanged on a secondary market ultimately established the precedent. As the accusations against the Ripple executives were dismissed, the case also underwent a major change.
Regarding the SEC and Ripple’s request for a briefing schedule to discuss institutional sales of XRP—the part of the XRP litigation in which the company was found to have broken securities law—Judge Torres just authorized an order.
Judge Torres gave the parties until November 9 to turn in a unified briefing schedule.