The SEC Drops Charges Against Ripple Executives: A Deeper Look
The U.S. Securities and Exchange Commission (SEC) has decided to drop its charges against Ripple executives Brad Garlinghouse and Christian Larsen. While this news may have initially been seen as a victory for the crypto community, industry experts offer a different perspective.
Ran Neuner, host of CNBC Crypto Trader, cautioned that the SEC’s move could potentially expedite the appeal process. Neuner explained that the SEC had to wait until the case concluded before appealing, but now they could potentially appeal sooner. He advised everyone to be cautious and smart about the situation.
John Deaton’s Analysis: The SEC Can’t Appeal Immediately
Contrary to Neuner’s speculation, John Deaton, Founder of CryptoLawUS and an advocate for XRP, delved into the legal intricacies that many might overlook. Deaton argues that the SEC cannot immediately appeal.
Deaton clarified that the penalty phase of the case must occur first. Drawing from the LBRY case as an example, he explained that it took eight months after a summary judgment for a final, appealable judgment to be entered. This phase involved extensive discovery, including interrogatories and document production, leading up to written briefs and oral arguments.
The Lengthy Process Ahead
In the LBRY case, where $23 million was at stake, it took nearly eight months to negotiate a $130K fine. In comparison, the Ripple case involves a staggering $770 million. Deaton believes that arguing over such a substantial amount will be a complex and time-consuming process, particularly since Ripple is likely to argue for exemptions on ODL transactions and legitimate business costs.
Deaton also refutes the idea that the SEC dismissed the case to facilitate an immediate appeal. He argues that the SEC dropped the charges because it had a slim chance of winning and that the witness list would have put certain individuals in an uncomfortable spotlight. Therefore, the dismissal was a strategic retreat.
The Uncertain Road Ahead
While the SEC’s withdrawal of charges may seem like a victory at first glance, John Deaton’s insights suggest that there is still an uncertain and lengthy path ahead. Deaton believes that it could take months before an appealable judgment is reached in this case.
Hot Take: Ripple’s Future Hangs in the Balance
The recent development of the SEC dropping charges against Ripple executives Brad Garlinghouse and Christian Larsen may not be as straightforward as it seems. While it initially appeared to be a positive outcome for Ripple and the crypto community, experts like John Deaton argue that the road ahead remains filled with uncertainty. The penalty phase of the case must occur before any potential appeal, and given the substantial amount at stake, this process is expected to be complex and time-consuming. Additionally, Deaton suggests that the SEC’s decision to drop the charges was based on their slim chances of winning and to avoid shedding an uncomfortable spotlight on specific individuals. As Ripple’s future hangs in the balance, only time will tell how this legal battle will unfold.
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