According to the former lawyer, the SEC underestimated that most of Ripple’s XRP sales occurred overseas.
Scott Chamberlain, a former lawyer and co-founder of Evernode, a proposed Layer 2 smart contract protocol for the XRP Ledger, has shared five predictions for the outcome of the United States Securities and Exchange Commission (SEC) case against Ripple.
“With a decision in SEC v @Ripple seemingly nigh, I thought I’d do the stupid thing and predict 5 outcomes,” Chamberlain wrote at the beginning of a Twitter thread today.
Chamberlain’s 5 Summary Judgment Outcomes
Firstly, the Evernode co-founder believes that the SEC will lose in its claim against Ripple executives Brad Garlinghouse and Chris Larsen. Recall that the SEC had named the executives in its complaint against Ripple, accusing them of aiding and abetting the offer and sale of unregistered securities, XRP.
As highlighted by CryptoLaw founder Attorney John E. Deaton, the SEC has to prove that the executives were “reckless” not to know that XRP was a security. According to Chamberlain, the SEC lacks the evidence to prove this.
Secondly, Chamberlain predicts that the court would find that Ripple’s overseas sales of XRP are outside the court’s jurisdiction. The former attorney claimed that deeming these as transactions completed in the U.S. would set a new precedent.
As a third prediction, the XRPL Layer 2 builder suggests that the court, in its final judgment, would also dismiss the SEC’s claim that XRP itself is a security. Notably, this is the claim that attracted Deaton, who represents thousands of XRP holders as a friend of the court, to the case. Like Deaton, Chamberlain argues that the SEC has no precedent supporting it. The former lawyer says the regulator came up with this to skip an analysis of each XRP sale and avoid facing the issue of overseas sales.
In his penultimate prediction, the former lawyer asserts that what is left is whether any Ripple sales of XRP in the U.S. involved an unregistered investment contract. Ultimately, Chamberlain predicts that the SEC would seek a settlement because of his second and third predictions. According to the former lawyer, the SEC underestimated that most of Ripple’s XRP sales occurred overseas.
An End in Sight
With the extended legal battle drawing to a close, at least at the district level, it is unsurprising that speculation about its outcome is at a fever pitch.
For the most part, Chamberlain’s predictions align with earlier predictions and analyses by Deaton. Notably, the attorney had predicted that there would be no out-of-court settlement until after a summary judgment ruling to stay a potential trial or appeal.
In addition, the CryptoLaw founder has asserted that the only possible victory for the SEC would be that Ripple sold securities from 2013 to 2017. Consequently, he believes there would be no disgorgement or injunction against XRP sales, but Ripple may be asked to pay a fine.
The community expects a ruling from the judge any day now.