The SEC’s Vengeance: More than Just a Legal Battle
John Deaton, a pro-XRP lawyer and founder of CryptoLawUS, believes that the SEC is seeking revenge against Ripple. The SEC wants to make an example out of Ripple and is aiming for a penalty of $770 million. It’s not just about determining whether XRP is a security; the SEC is determined to punish Ripple. Deaton explains that the penalty phase is like a second case with additional legal processes.
Ripple intends to significantly reduce the proposed penalty by excluding certain transactions and closely examining salaries, expenses, and costs. Deaton cites a similar case involving LBRY, where the SEC initially sought $23 million but settled for a $130,000 fine. He suggests that Ripple has a chance to negotiate a much lower penalty.
A critical date in this case is January 17, 2024, when oral arguments on the Coinbase motion will take place. If Coinbase wins, it could force the SEC to reconsider its strategy and potentially lead to a settlement with Ripple. However, if Coinbase loses, it may be unlikely that Ripple and the SEC reach an agreement.
Deaton highlights the conflicting signals from federal agencies regarding XRP’s classification. He mentions past meetings between Chris Larsen and financial agencies in 2013 and settlements between FinCEN and DOJ with Ripple in 2015, where XRP was declared as a “convertible virtual currency.” This ambiguity could work in Ripple’s favor during the case.
The Timeline: Why a Quick Settlement is Off the Table
Deaton predicts that Judge Torres won’t issue a final judgment before late summer at the earliest. He also warns that it could take up to a year for an appeal to be filed. During this time, Ripple may incur significant legal fees.
Hot Take: The Uncertain Road Ahead for Ripple
The SEC’s aggressive stance and Ripple’s determination to fight back have created a complex and uncertain path for the future of XRP. John Deaton’s insights shed light on the ongoing legal battle, highlighting the SEC’s desire for revenge and Ripple’s efforts to reduce the proposed penalty. The upcoming oral arguments on the Coinbase motion could be a turning point in this case, potentially influencing the SEC’s strategy and paving the way for a settlement. However, with conflicting signals regarding XRP’s classification and a lengthy timeline ahead, the road to resolution remains unclear. Ripple must navigate these challenges as they seek a favorable outcome.
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