Ripple’s legal battle against the US Securities and Exchange Commission (SEC) is going to be a prolonged one, stretching up to a year, according to pro-XRP lawyer John Deaton. In a post on social media platform X (formerly Twitter), Deaton hinted that a settlement may be considered, but only if Coinbase’s motion to dismiss the SEC’s lawsuit against it is granted.
“No serious” settlement talks between Ripple and SEC
Deaton also opened up about how Ripple, its senior executives, and the SEC have failed to engage in settlement discussions thus far. “I do not believe there has been a single serious conversation regarding a settlement between Ripple, Brad Garlinghouse, Chris Larsen, and the SEC. The SEC is pissed and embarrassed and wants $770M worth of flesh,” he tweeted.
As I said on @CryptoLawUS TV yesterday with @attorneyjeremy1 and Thien-Vu, I do not believe there has been a single serious conversation regarding settlement between @Ripple @bgarlinghouse @chrislarsensf and the @SECGov. The SEC is pissed and embarrassed and wants $770M worth… https://t.co/kcXvsrPgaa
— John E Deaton (@JohnEDeaton1) October 25, 2023
The attorney explained that the penalty phase is complex and time-consuming, comparing it to a second legal case, which requires depositions, document requests, emails, financial records, contracts, and on-demand liquidity (ODL) transactions. While Ripple is likely to be slapped with a $770 million fine, Deaton says the crypto company could attempt to lower the bill by excluding ODL transactions and slashing other expenses.
Predicting a timeline for a judgment in the case, Deaton said he doesn’t expect US District Judge Analisa Torres – who is overseeing the SEC vs. Ripple case — to deliver a final verdict “until late summer, at the earliest.” “It could literally take a full year before a final appeal is filed in the case.”
Ripple’s fate tied to SEC’s lawsuit against Coinbase
Furthermore, Deaton suggested that the outcome of Ripple’s case largely depends on the SEC’s lawsuit against Coinbase. Deaton says if the federal judge tosses out the SEC’s lawsuit against Coinbase, the regulator may change its attitude towards cryptocurrencies and potentially reach a settlement with Ripple.
On the other hand, if Coinbase’s motion is rejected, Deaton does not expect a settlement to occur. With the oral argument for Coinbase’s motion set to take place in January 2024, a verdict is expected within 60-120 days. Ripple will likely spit out millions of dollars in legal fees during this time as it attempts to bring down the $770 figure.
SEC surrenders in the legal battle
Last week, the SEC dropped the charges against Ripple executives—though the crypto company itself is not out of the woods yet. Judge Torres had ruled in July that Ripple’s sale of XRP tokens to institutional investors violated securities law.
Legal experts opine the SEC has a 3-14.2% chance of winning the case against Ripple. In other news related to Ripple, the company has posted a new job advertisement, prompting speculation that Ripple is planning to launch an initial public offering (IPO).
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