Appearing on CryptoLawUS TV, lawyer John E Deaton shared his thoughts on the ongoing Ripple vs SEC lawsuit. Deaton does not believe there have been any serious settlement talks between Ripple executives Brad Garlinghouse and Chris Larsen and the SEC.
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No End in Sight for Lawsuit
The SEC is seeking $770 million in disgorgement from Ripple and appears unwilling to settle at this time, according to Deaton. He believes the SEC wants to make an example of Ripple due to being “pissed and embarrassed” over the prolonged legal battle.
Deaton explained that the penalty phase of the case will be like a second trial, requiring more depositions, interrogatories, and document discovery. Ripple aims to drastically reduce the $770 million figure by excluding certain transactions and expenses from the calculation.
Potential for Reduced Disgorgement
In a follow-up post, Deaton expressed optimism that Ripple will succeed in greatly lowering the $770 million disgorgement amount. He noted this is not a fraud case, but rather a dispute over whether XRP transactions qualified as unregistered securities sales.
Deaton pointed to government agencies classifying XRP as a virtual currency, not a security, during the 2013-2019 timeframe. He also cited SEC staff being permitted to trade XRP themselves until 2019. With these facts, Deaton believes Judge Torres will reach an appropriate fine based on lack of clarity around XRP’s status, not try to ‘hurt Ripple.’
The lawyer provided an insightful update on the drawn-out Ripple vs SEC battle. With both sides digging in, the lawsuit may continue well into 2024 unless a pivotal event changes the landscape. But Deaton sees a reasonable chance for Ripple to mitigate the SEC’s massive disgorgement request.
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