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Prominent cryptocurrency attorney John E. Deaton has offered insights into the Ripple Labs XRP lawsuit against the Securities and Exchange Commission (SEC). He contends that a settlement valued at $20 million or less would constitute a significant legal triumph for the company.
In a recent X social media post, Deaton strongly refuted the idea that the lawsuit’s result was an even 50-50 outcome for the SEC, asserting that it leaned closer to a 90-10 advantage in favor of Ripple. Deaton’s remarks were prompted by a post from Stuart Alderoty, Ripple’s Chief Legal Officer, highlighting another legal setback for the SEC.
Deaton’s viewpoint resonates with the sentiment in the cryptocurrency community, which generally views the suggested $20 million settlement as a positive resolution for Ripple. This assessment considers the potential consequences of the XRP lawsuit and the broader regulatory environment for digital currencies.
The people who’ve argued that the SEC got a 50-50 victory in the @Ripple case are 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. https://t.co/Xe6SYBiTCJ
— John E Deaton (@JohnEDeaton1) November 4, 2023
Stuart Alderoty’s post further adds to the storyline, pointing out that the SEC faced another defeat this week, continuing a series of setbacks. According to Alderoty, in the case of SEC v. Govil, the 2nd Circuit ruled that the SEC cannot request a substantial disgorgement award without first demonstrating actual financial harm to “investors.“ In essence, it implies that if there’s no harm, there’s no penalty.
In December 2020, the SEC initiated legal action against Ripple Labs, accusing the firm of conducting an unregistered securities offering by selling XRP, its native cryptocurrency.
Ultimately, a precedent was established 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 the charges against Ripple executives were reduced.
In the meantime, Judge Torres has recently granted approval for an order regarding 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 determined to have breached securities laws. Judge Torres instructed the parties to provide a joint briefing schedule no later than November 9.