- Attorney John Deaton forecasts a lengthy legal process for Ripple-SEC, possibly into late summer, citing past cases as precedent.
- Coinbase lawsuit outcome could influence Ripple’s fate, potentially leading to a settlement or prolonged battle.
- Deaton emphasizes nuanced understanding, highlighting Ripple’s history of engagement with U.S. regulators in the complex case.
In a recent post via X (formerly known as Twitter), a prominent attorney supporting XRP investors, John Deaton, has laid bare his predictions and insights on the much-discussed legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC). Deaton’s commentary unveils a prolonged timeline before a final judgment might surface, shedding light on the grim possibilities of an out-of-court settlement between the feuding parties.
“Looking at the current scenario, I genuinely believe that Ripple, Brad Garlinghouse, Chris Larsen, and the SEC haven’t had a single serious dialogue aimed at settling,” Deaton shares. He elaborates on the extensive and meticulous nature of the penalty phase, which he likens to embarking on a second lawsuit altogether. As he explains, this phase necessitates a myriad of legal procedures, including but not limited to depositions, detailed document analysis, and a deep dive into various financial transactions.
Ripple’s Legal Marathon: A Timeline Prediction
Pulling from his extensive legal expertise, Deaton paints a comprehensive timeline for the ongoing Ripple-SEC litigation. He parallels the LBRY case, noting the eight-month additional litigation period that followed an initial $23 million demand from the SEC, eventually culminating in a mere $130,000 fine.
“Judging by these precedents, I am led to believe that a conclusive judgment from Judge Torres may not see the light of day until the late summer, if not longer,” Deaton comments.
Additionally, he points out the pivotal nature of the ongoing lawsuit between Coinbase and the SEC, suggesting that its outcome could be crucial in determining the course of Ripple’s legal journey. A win for Coinbase could force the SEC to reconsider its stance on digital currencies, possibly leading to a settlement with Ripple. Conversely, a loss for Coinbase might solidify the SEC’s position, leaving Ripple with slimmer chances of a settlement.
As we edge closer to the oral arguments scheduled for January 17, 2024, in the Coinbase case, and with a ruling expected within the subsequent two to four months, Deaton hints at the possibility of the SEC employing delay tactics in the Ripple case, aligning with his late summer prediction.
The Nature of Penalties and Ripple’s Historical Engagements
Deaton expresses confidence in Ripple’s ability to negotiate the anticipated $770 million penalty, clarifying that this is not a case rooted in allegations of fraud. He underscores the importance of understanding that the objective here is to determine a fair fine against Ripple for its role in what some consider the sale of unregistered securities, set against the backdrop of a new asset class other federal entities have recognized as ‘virtual currencies.’
Furthermore, Deaton delves into Ripple’s historical interactions with various U.S. financial regulators. He highlights Ripple’s proactive engagements, dating back to 2013, with agencies such as the SEC, Treasury, and Federal Reserve. By 2015, XRP had received recognition as a “convertible virtual currency” by the Financial Crimes Enforcement Network (FinCEN) and the Department of Justice (DOJ), with directives for Ripple to comply with banking laws.
Additionally, he points out that a day before the infamous “Hinman speech” in 2018, SEC enforcement lawyers did not recommend any cessation of XRP sales or initiate any enforcement actions, signaling a complex regulatory landscape.
Deaton emphasizes the need for a nuanced understanding in this case, reminding us that even SEC enforcement lawyers were trading XRP until 2019. He trusts Judge Torres to navigate this intricate legal terrain judiciously, ensuring a fair and balanced resolution.
At the time of writing, XRP was trading at $0.5632, indicating a 3.13% increase in the past 24 hours.
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