SEC Presses for $700 Million Settlement from Ripple as Pro-XRP Lawyer Details What’s Next

SEC Presses for $700 Million Settlement from Ripple as Pro-XRP Lawyer Details What’s Next

Following the dismissal of the claims against Ripple’s CEO Brad Garlinghouse and co-founder Chris Larsen, the U.S. Securities and Exchange Commission (SEC) is moving forward with Ripple Labs to finalize a settlement. Notably, pro-XRP legal expert John Deaton has shared insights into how this settlement is expected to unfold.

Challenges Await the Settlement Process

Deaton expressed his belief that there has been no substantial discussion about a settlement between the SEC and Ripple and its key figures. He highlighted the SEC’s firm stance, stating that the Commission is determined and seeks a hefty $700 million fine from Ripple for its alleged violations of securities laws.

He also emphasized that the penalty phase is far from straightforward; in fact, it’s akin to a second case, involving extensive legal procedures such as depositions, interrogatories, document production requests, emails, bank records, contracts, and On-Demand Liquidity (ODL) transactions.

The settlement process becomes even more complicated due to the SEC’s insistence on a $700 million fine, while Ripple aims to significantly reduce this figure. Ripple’s strategy is to exclude ODL transactions from the settlement, which the SEC could argue were part of institutional sales violating securities laws.

Deaton pointed to the SEC’s previous case against the decentralized content-sharing platform LBRY, which took an additional eight months of litigation before the court ruled for a fine of $111,614. This case saw both parties filing multiple briefs and conducting depositions.

Prospects for the SEC vs. Ripple Case

Deaton does not anticipate a final judgment from Judge Analisa Torres until at least late summer. Thus, he suggested that it could be an entire year before either the SEC or Ripple can file an appeal in this ongoing case.

He also highlighted the role of Coinbase’s Motion To Dismiss (MTD) in shaping the outcome of this case and a possible settlement. If Judge Failla grants the motion, the SEC will be compelled to reevaluate its anti-crypto agenda and explore potential settlement terms with Ripple.

However, if Coinbase’s MTD fails, the likelihood of a settlement decreases. Coinbase is seeking to have the SEC’s case against it dismissed, claiming the Commission lacks jurisdiction over its activities. The oral arguments for Coinbase’s MTD are scheduled for January 17, 2024, with a ruling expected within 60 to 120 days.

XRP has experienced price fluctuations amidst these legal developments.