Ripple’s Case Against SEC Could Drag On For A Year: The Why and How of It

Ripple’s Case Against SEC Could Drag On For A Year: The Why and How of It

Key Insights

  • Ripple's case against the SEC is likely to drag on for at least a year, and could even take longer if there is an appeal.
  • The SEC is seeking a hefty $770 million fine from Ripple
  • The outcome of Coinbase's lawsuit against the SEC could be a game-changer for Ripple.
  • Deaton is confident that Ripple will be able to win its case, as XRP has already been declared a "virtual currency" by other federal agencies.
  • Ripple's recent partnership with Uphold is a positive development, as it will provide Ripple's clients with improved crypto liquidity capabilities.

The battle between Ripple Labs and the US Securities and Exchange Commission (SEC) continues to thicken with each day.

This case has been one of the most closely watched cases in the crypto industry to date. As of recently, the ongoing court battle appears more and more likely to conclude soon.

Recall that sometime in 2020, the SEC hit Ripple with a lawsuit out of the blue. According to this lawsuit, the SEC alleged that Ripple, in an initial sale of XRP, was selling the cryptocurrency as an unregistered security.

In this article, we will be going over predictions and insights as to the ongoing case from John Deaton, a prominent attorney who represents thousands of XRP investors.

Deaton Says No Settlement In Sight

This is bad news.

According to a recent tweet from  John Deaton, there is little hope for a settlement between Ripple and the SEC anytime soon.

In the tweet, Deaton says that the SEC is "pissed and embarrassed" by Ripple's strong defence and plans to force the company and its executives (Brad Garlinghouse and Chris Larsen) to pay a hefty penalty of $770 million.

Deaton went further to explain that to wring this fine out of Ripple's pockets, several more lawsuits and documents have to be filed including depositions, interrogatories, requests for documents, and analysis of Ripple's On-Demand Liquidity (ODL) transactions.

Deaton cited LBRY as an example. LBRY is another crypto company that faced a similar lawsuit from the SEC.

During LBRY's time, the company managed to reduce the SEC's initial demand of $23 million to a mere $130,000 after eight more months of back-and-forth battles in court.

In summary, Deaton says that a final judgment from Judge Torres, who presides over the case, would not come until late summer 2024 at the earliest.

As if that wasn't bad enough, Deaton also says that it could take another year before an appeal is filed in the case.

Coinbase Case Could Be a Game-Changer

Remember how the SEC also went on a lawsuit spree a few months ago around July, suing major companies like Binance and Coinbase?

Deaton also compared the ongoing case with XRP to Coinbase's.

Now, Coinbase is the largest crypto exchange in the US currently. And according to recent reports, Coinbase has also sued the SEC right back, for the initial threat to sue the crypto exchange over its planned launch of a new lending product that would allow users to earn interest on their crypto holdings.

Coinbase argues that the SEC has no authority over its product and that the SEC's actions are arbitrary and completely lack substance.

If Coinbase beats the SEC in court, Deaton says that the agency would be forced to change its anti-crypto stance and consider a settlement with XRP.

One that doesn't involve nearly a billion dollars in fines, and another year or two of dances in and out of court.

However, Deaton also warns that if Coinbase loses its motion, then Ripple has no hope of a settlement with the SEC.

The oral argument on Coinbase's motion in court is set to hold on January 17, 2024, and a ruling is expected within 60 to 120 days after that.

Deaton suggested that this could be one reason why the SEC tries to delay the final ruling against Ripple. He says that the agency is trying to wait for the outcome of Coinbase's case.

For The Last Time, XRP Is Not a Security!

According to Deaton, things could go really bad if Ripple loses this case.

However, the lawyer also showed confidence that Ripple would be able to reduce the amount the SEC is demanding, by excluding ODL transactions and minimizing other expenses.

He went further to clarify that this is not a fraud case, but rather a case about whether Ripple sold unregistered securities or not.

Deaton pointed out that XRP had been declared a "virtual currency" by other federal agencies, such as FinCEN and DOJ, as early as 2015, a long time before the SEC came out with its lawsuit.

He also noted that Ripple had engaged with various regulators, including the SEC, Treasury, and Federal Reserve, since 2013.

Deaton even revealed that in 2018, SEC enforcement lawyers put XRP through the Howey test (used to determine whether an asset is a security or not).

And despite this, these lawyers did not recommend that Ripple stop selling XRP or initiate an enforcement action against it.

In conclusion, though, Deaton says that he does not think Judge Torres will be harsh on Ripple given these facts and that the end of the tunnel may have some light after all.

XRP Surges 15% Following Ripple Partnership With Uphold

At the time of writing, XRP is trading at $0.56 and has surged by as much as 15% over the last week, following a recent partnership with Uphold, another Web3 financial platform.

XRP's price  | Source: <a href='' target='_blank' rel='noreferrer noopener'><u>CoinMarketCap</u></a>
XRP's price  | Source: CoinMarketCap

Uphold, if you didn't know is a web3 platform that supports several assets and provides access to more than 200 fiat and cryptocurrencies.

It also features a completely automated, high-frequency trading stack linked to thirty underlying trading venues and it can offer deep liquidity, numerous transaction execution choices, and remarkably tight spreads.

Ripple's partnership with Uphold is a highly positive event, given that Ripple will now be able to provide its clients with improved crypto liquidity capabilities.

Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.

Related Stories

No stories found.
Voice Of Crypto