Lawyer Deems Potential $20M Ripple-SEC Settlement a 99.9% Victory for XRP

ByGavin Cole

Nov 5, 2023

According to John E. Deaton, a seasoned crypto attorney, if Ripple settles its ongoing lawsuit with the Securities and Exchange Commission (SEC) for $20 million or less, it would represent a near-total triumph for the blockchain company.

Legal Expert Weighs in on Ripple vs. SEC Proceedings

John E. Deaton, a seasoned attorney in the cryptocurrency sphere, has recently voiced his opinion on the ongoing lawsuit between Ripple Labs and the Securities and Exchange Commission.

In stark contrast to opinions suggesting an even-handed result, Deaton asserts that Ripple has the upper hand. According to his evaluation, a settlement of $20 million or less would not just be a triumph, but rather an overwhelming victory for Ripple.

This amount, in the grand scheme of the case, would represent a mere fraction of a penalty compared to the gravity of the accusations leveled by the SEC, thereby signaling a decisive win for Ripple.

Deaton’s stance aligns with that of Ripple’s Chief Legal Officer, who has also publicly noted setbacks faced by the SEC in this high-profile case.

Legal Analyst Supports Ripple’s Edge in SEC Suit

Building on Deaton’s comments, the prevailing view among legal experts suggests a distinct advantage for Ripple in their ongoing legal skirmish with the SEC.

A settlement of $20 million, which may appear modest at face value, signifies a considerable triumph for Ripple amidst the complex regulatory environment of digital assets.

This perspective gains further credence from Alderoty’s observations on a recent appellate court decision, reinforcing the principle that punitive measures such as disgorgement require proof of financial harm to investors.

This principle is especially pertinent in the Ripple case and is seen as a pivotal moment that could shape the enforcement landscape for cryptocurrency regulations.

Ripple’s Ongoing SEC Lawsuit

The legal battle between Ripple Labs and the Securities and Exchange Commission (SEC) dates back to December 2020 when the SEC charged Ripple with conducting an unregistered securities offering by selling XRP.

The pivotal case has captivated the cryptocurrency industry, with implications that reach far beyond Ripple, potentially influencing the regulatory framework for digital assets within the United States.

The outcome of this lawsuit is poised to create a benchmark for how cryptocurrencies are classified and treated by regulatory bodies moving forward.

A notable development in the SEC’s lawsuit against Ripple occurred when Judge Analisa Torres ruled that XRP cannot be considered a security when traded in secondary markets. This decision represented a significant shift in the case, particularly as charges against Ripple executives were dismissed.

Govil Decision’s Implications for Ripple

Further advancements in the case saw Judge Torres granting a motion that compels both the SEC and Ripple to engage in a joint briefing. The focus of this briefing is to discuss the institutional sales of XRP, the singular issue where Ripple was deemed to be in breach of securities law.

With a deadline set for November 9 to submit the joint briefing schedule, this order moves the parties towards addressing one of the critical elements of the lawsuit.

The Ripple lawsuit sees a pivotal development from the Jignesh Govil case, where the SEC is mandated to demonstrate investor harm for disgorgement.

This principle, stemming from the Supreme Court’s ruling in Liu v. SEC, suggests that the SEC must prove that disgorgement fines directly compensate defrauded investors. This adds a significant facet to Ripple’s defense, potentially limiting the extent of their financial penalties.

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