Attorney John Deaton’s Argument for Ripple’s Low Disgorgement
If you have been following the ongoing legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC), you may have heard about Attorney John Deaton’s argument in favor of Ripple having to pay a much lower disgorgement amount than the estimated $770 million. In fact, Deaton suggested that Ripple might only need to pay $20 million or less.
Reasons Deaton Stated
Deaton based his argument on the Supreme Court’s Morrison decision, which limits American jurisdiction over purchases made outside of the country. He also pointed out that XRP is considered an exchange or utility token by regulators in various countries, including the UK, Japan, and Switzerland. This international classification could significantly impact the SEC’s attempt to pursue disgorgement for sales that occurred outside of its jurisdiction.
Additionally, Deaton noted that most institutional XRP sales were to certified investors at prices below the stock’s current market value, suggesting that these investors suffered no losses. He also disclosed that 75,000 XRP owners have joined the SEC complaint, claiming that the regulatory agency is the real aggressor rather than Ripple.
The Same Claim By Other Prominent Figures
Several prominent members of the Ripple community have questioned the basis of SEC’s fine and authority. Attorney Jeremy Hogan believes there’s a high chance that the hefty $770 million fine currently looming over Ripple may be significantly reduced. Stuart Alderoty, Chief Legal Officer of Ripple, also shared his perspective on an important precedent in a similar case involving the SEC.
In response to these claims, Mobarak argued that since there’s no evidence of harm to investors, the SEC cannot reasonably justify imposing a massive $770 million fine on Ripple for its institutional XRP sales breach. According to Mobarak, it’s clear that the SEC lacks a solid basis for imposing such substantial fines on Ripple when there’s no proof of harm to investors.
Hot Take: Optimism for Ripple’s Outcome
The consensus among legal experts and prominent figures in the crypto community suggests optimism for Ripple’s outcome in its legal battle against the SEC. With strong legal arguments and support from industry professionals, it’s likely that Ripple will see a favorable resolution in this high-stakes case.
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