Will the SEC Provide Compensation for Their Loss in the XRP Lawsuit against Ripple?
Attorney John Deaton has shared his insights on the legal battle between the SEC and Ripple (XRP) in a recent interview with Thinking Crypto. During the discussion, Deaton touched upon the divergent opinions among the XRP community concerning Ethereum. He also highlighted the SEC’s approval of an Ethereum Futures ETF, as well as BlackRock’s application for an Ethereum ETF, indicating that assets beyond XRP, Ethereum, and these ETFs are fair game.
Deaton shed light on the conflicting perspectives within regulatory bodies, with the CFTC chair considering most cryptocurrencies as commodities, while SEC Chair Gary Gensler deems everything, including non-financial items, as securities.
Shifting the focus to the SEC vs. Ripple case, Deaton addressed the recent development where charges against Ripple executives were dropped. Currently, in the penalty phase, he explained that the judge ruled certain XRP transactions as non-securities, especially those involving contracts with institutions.
When asked about the possibility of the SEC reimbursing legal fees, Deaton responded, “No. The judge found that Ripple violated the law. She cited a 1946 case, stating, ‘Technically, that doesn’t mean she wants to punish Ripple.’ In our legal system, the losing party is not required to pay the winner’s fees. Unlike in other countries, where the winner receives the other party’s attorney’s fees, we do not follow that practice in America as it would discourage lawsuits.”
Looking ahead, Deaton predicted that the SEC would include all sales in the penalties, while Ripple would argue for exclusions based on factors such as utility transactions and exemptions for accredited investors. The final remedy will be determined by the judge.
Regarding international sales, Deaton clarified that the SEC’s authority is limited to the United States, citing the Morrison case. He explained that Ripple’s global XRP sales fall outside the SEC’s jurisdiction. Discussing a potential resolution in 2024, Deaton mentioned that both parties have the right to appeal. However, he expressed confidence in the judge’s decision, stating that an appeal would not alter the outcome.
Tags: Ripple (XRP), SEC