Prominent cryptocurrency lawyer John Deaton has offered insight into the lawsuit filed by the United States Securities and Exchange Commission (SEC) against Ripple. He says a settlement of $20 million or less would be a significant legal triumph for the company.
Deaton’s view echoes the sentiment of the cryptocurrency community, which generally views the suggested $20 million settlement as a positive solution for Ripple. This assessment takes into account the potential consequences of the XRP (XRP) lawsuit and the broader regulatory environment for digital currencies.
Those who argued that the SEC achieved a 50-50 victory @Ripple the case is false. It was more like 90-10 in favor of Ripple. If Ripple ends up paying $20 million or less, that’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 string of setbacks. According to Alderoty, in SEC v. Govil, the U.S. Court of Appeals for the Second Circuit ruled that the SEC could not seek substantial restitution without first demonstrating actual financial harm to “investors.” if there is no harm, there is no penalty.
In December 2020, the SEC filed a lawsuit against Ripple Labs, accusing the company of conducting an unregistered securities offering by selling XRP, its native cryptocurrency.
Ultimately, precedent was set when Judge Analisa Torres determined that the asset was not a security when traded in the secondary market. Additionally, the case has undergone significant changes as the charges against Ripple executives have been reduced.
Related: Ripple to power Georgia’s central bank’s digital currency, digital lari
Meanwhile, Torres recently approved 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 violated securities laws. Torres asked the parties to provide a joint briefing schedule no later than November 9.
Review: Crypto Regulation: Does SEC Chairman Gary Gensler Have the Final Say?