Renowned crypto lawyer John E. Deaton has shared his perspective on Ripple Lab’s ongoing XRP lawsuit with the Securities and Exchange Commission (SEC), expressing his belief that any potential settlement worth $20 million or below will form an overwhelming legal victory for the company.
Deaton’s Perspective in XRP Lawsuit
In a recent post on social media platform X, Deaton firmly disagreed with any notion that the outcome of the lawsuit was a mere 50-50 victory for the SEC, emphasizing that it was closer to 90-10 in Ripple’s favor. Deaton’s comments come in response to a post by Stuart Alderoty, Ripple’s Chief Legal Officer, highlighting another legal setback for the SEC.
In his post, Deaton stated, “The people who’ve argued that the SEC got a 50-50 victory in the Ripple case are 100% wrong. It was more like 90-10 in Ripple’s favor. If Ripple ends up paying $20M or less, it’s a 99.9% legal victory.”
Deaton’s perspective reflects the sentiment within the cryptocurrency community, which largely sees the proposed $20 million settlement as a favorable outcome for Ripple, given the potential implications of the XRP lawsuit and the broader regulatory landscape surrounding cryptocurrencies
Stuart Alderoty’s post also contributes to the narrative, where he noted that the SEC suffered another loss this week to continue the streak. Per Alderoty, “the 2d Circuit in SEC v Govil held that the SEC can’t ask for a crippling disgorgement award w/o first proving that ‘investors’ suffered actual financial harm. In other words, no harm, no foul.”
Ripple’s Legal Battle
The SEC filed a lawsuit against Ripple Labs in December 2020, alleging that the company had conducted an unregistered securities offering through the sale of XRP, its associated native cryptocurrency.
The lawsuit argued that XRP should be classified as a security and that Ripple should have registered its token sales with the SEC. This lawsuit sent shockwaves through the crypto market, as it had the potential to set a precedent for the regulation of digital assets in the United States.
The precedent was eventually set when Judge Analisa Torres vindicated the asset as a non-security when traded on a secondary marketplace. The case also shifted significantly as the charges on Ripple executives dropped.
Meanwhile, Judge Torres recently approved an order regarding the SEC and Ripple’s request to propose a briefing schedule to confer on institutional sales of XRP, the aspect of the XRP lawsuit in which the firm was found to have violated securities law.
Judge Torres directed the parties to submit a joint briefing schedule by November 9.