Prominent cryptocurrency attorney John Deaton has offered his opinion on the United States Securities and Exchange Commission (SEC) vs. Ripple lawsuit. He believes that if Ripple pays a settlement of $20 million or less, it would be a significant legal victory for the company. In a tweet, Deaton refuted the idea that the lawsuit’s result is a 50/50 balance, claiming that it is closer to a 90/10 advantage in favor of Ripple.
This sentiment was further echoed by Ripple’s chief legal officer Stuart Alderoty in a post highlighting another legal setback for the SEC. Alderoty revealed that in the SEC vs. Govil case, the U.S. Court of Appeals for the Second Circuit ruled that the SEC cannot request a substantial disgorgement award without first demonstrating actual financial harm to “investors.” If there is no harm, there is no penalty.
The SEC initiated a lawsuit against Ripple Labs in December 2020, accusing the firm of selling XRP, its native cryptocurrency, in an unregistered securities offering. However, Judge Analisa Torres determined that the asset was not a security when traded on a secondary market. Additionally, the charges against Ripple executives were reduced.
Most recently, Judge Torres granted approval for an order regarding the SEC and Ripple’s joint request for a briefing schedule to address institutional sales of XRP. The parties must provide the joint briefing schedule no later than November 9.
The cryptocurrency community generally views the potential $20 million settlement as a positive resolution for Ripple, considering the possible implications of the XRP (XRP) lawsuit and the broader regulatory environment for digital currencies.