‘Embarrassed’ SEC Wants ‘$770M Worth of Flesh’ From Ripple: Details

Pro-XRP lawyer John Deaton issues fresh speculations concerning the upcoming remedies stage of the legal tussle between Ripple and the SEC.

Attorney John Deaton, the lawyer representing thousands of XRP holders in the SEC v. Ripple lawsuit, has made fresh speculations regarding the remedies stage of the case.

In a recent tweet, Attorney Deaton said the Securities and Exchange Commission is embarrassed and pissed to the extent that it wants a whopping $770 million worth of flesh from Ripple.

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

Ripple Sold $770 Million Worth of Unregistered Securities

Notably, the $770 million mentioned by Deaton is the actual value of XRP Ripple sold to institutional investors. Recall that the court ruled in July that Ripple’s institutional sales violated federal securities laws.

As a result, the court recently ordered the parties to propose a briefing schedule for the remedies stage. Per the order, the parties have until November 9, 2023, to propose the briefing schedule.

However, if the parties do not come to an agreement on a suitable schedule, they shall jointly ask the court to schedule the briefing.

With the remedies stage around the corner, Attorney Deaton noted that the SEC wants the entire $770 million from Ripple for selling unregistered securities to institutional investors.

Ripple Will Drastically Reduce the Penalty

Interestingly, he speculated that Ripple will make significant moves to drastically reduce the $770 million the SEC wants as a fine. According to Deaton, the blockchain company will attempt to exclude On-Demand Liquidity (ODL) sales of XRP, salaries, and other legitimate business expenses.

The legal expert speculated that Ripple could spend millions of dollars in an attempt to reduce the $770M the SEC seeks.

“I believe Ripple will be successful in cutting the $770M figure down drastically,” Attorney Deaton added.

LBRY Cut Down SEC Demands

The pro-XRP lawyer recalled how LBRY cut down the SEC’s demand during the remedies phase of its lawsuit. Per Deaton, the SEC requested $23 million from LBRY for selling unregistered securities to investors.

However, after eight months of remedies proceedings, the LBRY judge finalized that the blockchain company should pay a fine of $130,000.

Deaton Highlights Conditions for Settlement

Furthermore, Deaton also commented on other aspects of the legal battle, including the prospect of a settlement in the case. In the tweet, Attorney Deaton suggested that the SEC v. Coinbase lawsuit will play a major role in determining whether the Ripple case will end in a settlement.

Recall that the SEC charged Coinbase in June with violating securities laws. Expectedly, the San Francisco-based exchange has already filed a motion to dismiss the SEC charges.

In response, Deaton made a conjecture that if Coinbase succeeds in having the SEC charges dismissed, it could potentially compel the regulator to shift its stance against cryptocurrencies. This change might then lead to negotiations for a potential settlement with Ripple.

However, he forecasted that there would be no settlement if the San Francisco-based exchange lost the case.

A Big Fight During SEC v. Ripple Remedies Phase

Meanwhile, top crypto enthusiasts believe the remedies stage of the SEC v. Ripple lawsuit would be intense. Fox Business journalist Eleanor Terrett reported that sources close to the matter disclosed that there would be a “big fight” during the proceeding.

She noted that while Ripple will attempt to reduce the penalty, the SEC wants a huge chunk of the $770 million for its bragging rights.