The legal battle between Ripple and the US Securities and Exchange Commission (SEC) has recently seen significant developments, with John Deaton, founder of Crypto Law, expressing his confidence that Ripple is likely to be victorious in the securities lawsuit. Deaton’s expertise in digital assets has made his opinion on the case highly sought after by the cryptocurrency community, who eagerly await the lawsuit’s outcome.
Crypto Law Founder John Deaton Highlights SEC’s Flawed Approach in Ripple Lawsuit
John Deaton, who also serves as an amicus curiae in the lawsuit, representing tens of thousands of XRP holders, has shared his insights on the ongoing litigation between Ripple and the SEC. Deaton has questioned the SEC’s approach to the case, suggesting that they failed to provide clear guidelines on what constitutes a security in the cryptocurrency industry.
Deaton has pointed out the SEC’s prior statements, such as Hinman’s 2018 assertion that Bitcoin and Ether were not securities, as setting a precedent for other tokens, including XRP. He also emphasized that Coinbase’s listing of XRP, with the SEC’s approval, further confirms its non-security status. Deaton believes the SEC’s lack of clarity regarding securities in the cryptocurrency industry has contributed to the ongoing legal battle between Ripple and the regulatory agency.
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Additionally, Deaton has questioned the SEC’s decision to sue Ripple instead of settling the matter through enforcement. He argued that if the issue were about securities law violations, the case would have been settled through enforcement rather than litigation. Deaton also noted that the SEC’s failure to send a cease-and-desist letter to Ripple suggests they had not definitively determined XRP to be a security.
Deaton’s Predictions on the Lawsuit’s Outcome Spark Interest in XRP Community
As the cryptocurrency community closely follows the lawsuit, Deaton has shared his thoughts on four possible outcomes that could occur in the Ripple vs SEC case.
The first possible outcome, as per Deaton, is a complete victory for Ripple, with the judge ruling that there is no investment contract involved and no post-duty sale obligations. This result would significantly benefit Ripple, as it would legally establish XRP as a non-security.
Another potential outcome, according to Deaton, is Judge Analisa Torres ruling in favor of Ripple for specific years, deciding that XRP did not qualify as securities in today’s secondary sales. This partial victory for Ripple would establish a legal precedent for XRP’s status, albeit for a limited period.
Deaton considers the third outcome, where the SEC wins outright, to be highly improbable. Although he initially assigned a zero chance to this scenario, he has since revised his assessment slightly. Nevertheless, Deaton remains confident that this outcome is a remote possibility.
The fourth and final outcome would see the case going to the jury for comments and eventual determination if none of the above scenarios materialize. This outcome would likely result in an extended legal battle, representing the least desirable outcome for both parties involved.
However, even though the case has progressed significantly, the attorney remains optimistic about the potential for both parties to reach a settlement prior to the summary judgment. Deaton emphasizes that the plaintiffs are prepared for such an outcome.
“Ripple has previously indicated their willingness to settle the case. Both their general counsel and their CEO have publicly stated that they would agree to a settlement immediately if the SEC were to consent to future secondary market sales,” Deaton explained.