Attorney John Deaton Makes Strong Case for Ripple in SEC Legal Battle
In the ongoing legal saga between Ripple and the U.S. Securities and Exchange Commission (SEC), attorney John Deaton, representing XRP holders, has made a compelling argument that the anticipated $770 million disgorgement for Ripple is unlikely to be imposed. Deaton bases his prediction on several influential factors that may sway the court’s judgment.
One of the key points emphasized by Deaton is the significance of the Supreme Court’s Morrison ruling, which limits the SEC’s jurisdiction to sales within the United States. This gains relevance as Ripple’s XRP sales in the United Kingdom, Japan, Switzerland, and other areas come under scrutiny. The legal standing of XRP in these jurisdictions bolsters Ripple’s stance against the SEC.
Deaton also highlights that regulatory bodies in the U.K. and Japan have not classified XRP as a security, allowing for lawful continuation of XRP sales in those regions. This classification poses a challenge to the SEC’s pursuit of disgorgement from global transactions outside the U.S.
Furthermore, Deaton points out that the legal action against Ripple is not centered on fraud but rather constitutes a regulatory disagreement. This differentiation is crucial as it shifts focus from punitive measures to regulatory adherence. Given that a substantial portion of XRP sales occurs outside the U.S. and involves accredited investors, the potential for disgorgement diminishes significantly.
Additionally, Deaton notes that most institutional XRP sales have not resulted in harm, as the current XRP price exceeds the levels during those sales, indicating a lack of investor losses. He also underscores the rapid nature of On-Demand Liquidity (ODL) transactions with XRP, occurring within seconds, reducing the potential for investor harm.
Interestingly, the accusations of harm are more directed at the SEC than Ripple, particularly among the 75,000 XRP holders participating in the legal action.
Deaton’s arguments present a strong case in favor of Ripple, suggesting that the potential disgorgement amount may be substantially reduced. As the legal battle continues to unfold, the outcome will be closely watched by the cryptocurrency industry and regulatory bodies around the world.