Prominent cryptocurrency lawyer John Deaton has offered insight into the United States Securities and Exchange Commission’s (SEC) lawsuit against Ripple. He maintains that a settlement of $20 million or less would constitute a significant legal win for the company.
In a recent social network mail, Deaton strongly refuted the idea that the outcome of the lawsuit was an even 50-50 outcome for the SEC, stating that he was leaning more toward a 90-10 advantage in Ripple’s favor. Deaton’s comments were motivated by a mail by Stuart Alderoty, Ripple’s chief legal officer, highlighting another legal setback for the SEC.
Deaton’s point of view resonates with sentiment in the cryptocurrency community, which generally views the suggested $20 million deal as a positive resolution for Ripple. This assessment considers the potential consequences of XRP demand and the broader regulatory environment for digital currencies.
The people who have argued that the SEC won a 50-50 victory in the @Vibe case are wrong. It was more like 90-10 in favor of Ripple. If Ripple ends up paying $20 million or less, it’s a 99.9% legal victory. https://t.co/Xe6SYBiTCJ
– John E. Deaton (@JohnEDeaton1) November 4, 2023
Stuart Alderoty’s post adds to the story, noting that the SEC faced another loss this week, continuing a series of setbacks. According to Alderoty, in the case SEC v. Govil, the Second Circuit ruled that the SEC cannot seek substantial damages without first demonstrating actual financial harm to “investors.” In essence, it implies that if there is no damage, there is no fine.
In December 2020, the SEC initiated legal action against Ripple Labs, accusing the company of conducting an unregistered securities offering through the sale of XRP, its native cryptocurrency.
In the end, a precedent was set when Judge Analisa Torres determined that the asset was not a security when traded on a secondary market. Additionally, the case underwent significant changes as charges against Ripple executives were reduced.
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Meanwhile, Judge Torres recently approved an order on the SEC and Ripple’s joint request to propose a briefing schedule to address institutional sales of XRP. This relates to the segment of the XRP lawsuit in which the company was found to have violated securities laws. Judge Torres ordered the parties to submit a schedule of joint briefings no later than November 9.
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