Attorney John Deaton has highlighted the major factor that could determine whether the Ripple and SEC case will end in a settlement.
Crypto-Law.US founder Attorney John Deaton has issued fresh comments regarding a settlement in the ongoing legal tussle between the SEC and Ripple. Deaton noted that he does not believe the U.S. SEC and Ripple have held any serious discussions to settle the case amicably.
As I said on @CryptoLawUS TV yesterday with @attorneyjeremy1 and Thien-Vu, I do not believe there has been a single serious conversation regarding settlement between @Ripple @bgarlinghouse @chrislarsensf and the @SECGov.
The SEC is pissed and embarrassed and wants $770M worth… https://t.co/kcXvsrPgaa
— John E Deaton (@JohnEDeaton1) October 25, 2023
Coinbase Lawsuit May Likely Determine SEC and Ripple Settlement
According to Attorney Deaton, a settlement in the Ripple lawsuit will be determined by the outcome of Coinbase’s motion to dismiss the charges filed by the SEC.
It can be recalled that in August, the San Francisco-based exchange filed a court motion seeking the dismissal of the SEC’s case.
In the motion, Coinbase claimed the SEC violated due process and abandoned its interpretation of the securities laws. Earlier this week, Coinbase filed another motion in response to the SEC’s rebuttal to the request.
Deaton, who recently said the Coinbase motion “has teeth to it,” noted that the oral argument in the case will be held on January 17, 2024, with a ruling expected to be given in 60 – 120 days afterward.
The pro-XRP lawyer speculated that if Coinbase wins the case, the SEC will be forced to pivot its anti-crypto agenda and work on settling with Ripple. However, Deaton predicts that there will be no settlement in the Ripple case if Coinbase loses its motion to dismiss the SEC charges.
Penalty Stage Could Linger for Several Months
Furthermore, Attorney Deaton also commented on the upcoming remedies stage in the SEC v. Ripple lawsuit. It bears mentioning that the remedies stage is the next phase of the Ripple lawsuit.
In this phase, the court will determine the appropriate penalty Ripple will pay for violating federal securities laws through its sale of XRP to institutional investors.
Reacting, Attorney Deaton referred to the penalty phase as a second case that requires the deposition and production of documents, including bank statements and On-Demand Liquidity (ODL) transactions.
Per Deaton, the SEC is embarrassed about the developments in the lawsuit that it wants “$770 million worth of flesh.” However, he expects Ripple to drastically reduce the amount by attempting to exclude ODL-related XRP sales, salaries, and travel expenses.
“I think Ripple will spend tens of millions of dollars in legal fees fighting to greatly reduce the $770M,” he added.
No Final Judgment Until Late Summer
Meanwhile, Attorney Deaton speculated that Judge Analisa Torres would not issue the final judgment until late summer. This is mainly because Deaton expects the remedies phase of the Ripple lawsuit to linger for several months before its resolution.
He recalled that the penalty phase of the SEC v. LBRY lawsuit took eight months of additional litigation. During the stage, Deaton noted that LBRY CEO Jeremy Kauffman was deposed again, with the parties also filing multiple briefs.
Notably, it was after eight months of heated legal battle on remedies that the LBRY judge issued the final judgment.
Timeline for Possible Appeal
In addition, Attorney Deaton also predicted that it could take a whole year before any of the parties in the SEC v. Ripple lawsuit will file an appeal.
It is worth mentioning that the SEC has made efforts to appeal the court’s summary judgment decision issued in July. However, the court denied the SEC’s request to certify an interlocutory appeal.
With the SEC dropping its case against Ripple execs Brad Garlinghouse and Chris Larsen, many legal experts predict that the regulator made the move to file an appeal sooner. Interestingly, Deaton believes it could take up to a year before any of the parties can officially file an appeal.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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