Crypto-law founder Attorney John Deaton has made a surprising remark regarding the acquisition of XRP by institutional investors.
In his recent tweet, Attorney Deaton said he won’t be surprised if he finds out that no institutional investor acquired XRP above $0.60.
Excluding ODL transactions, I wouldn’t be surprised if there isn’t a single institutional investor who acquired XRP over 60 cents. https://t.co/GHJRomndAr
— John E Deaton (@JohnEDeaton1) November 4, 2023
ODL-Related XRP Sales Excluded
The prominent legal expert excluded XRP purchases made by Ripple’s On-Demand Liquidity (ODL) clients. It is noteworthy that Ripple’s ODL solution uses XRP as a bridge between two fiats during cross-border settlements.
Based on ODL design, users are required to acquire XRP to facilitate cross-border payments through the solution.
Expert Outlines Appropriate Remedies in Ripple Case
Deaton made the remark in response to Attorney Jeremy Hogan’s tweet highlighting the appropriate remedies Ripple could pay for violating federal securities laws in relation to its institutional sales of XRP.
Reacting to the Second Circuit ruling in the SEC v. Govil case, Hogan suggested that the decision could impact the outcome of the remedies phase in the Ripple lawsuit.
The Govil case, which was introduced in 2021, saw the SEC charge the defendant with engaging in a fraudulent securities scheme through a company named Cemtrex.
Despite Aron Govil’s acceptance of returning the proceeds obtained from the scheme, the regulator demanded an extra disgorgement.
A federal court granted the SEC’s motion for additional disgorgement, thus prompting the defendant to seek an appellate review. Interestingly, the U.S. Court of Appeals for the Second Circuit overturned the lower court’s decision and remanded the case.
This time, the Second Circuit instructed the federal court to grant disgorgement only if Cemtrex investors suffered financial losses.
Based on the Second Circuit decision, Hogan stated that XRP holders would need to have incurred losses for Ripple to be liable during the penalty phase of the SEC lawsuit.
However, an XRP enthusiast pointed out that the damages sought by the SEC would only cover institutional investors who lost money. This is because Judge Analisa Torres, in a July 13 ruling, found that Ripple violated the law via its past sales of XRP to institutional clients.
Reacting, Attorney Morgan agreed with the user, emphasizing that Ripple could be liable only for institutional investors who acquired XRP above $0.60.
Correct. And now, it's only institutional buyers who bought XRP for over .60 cents.
— Jeremy Hogan (@attorneyjeremy1) November 3, 2023
XRP Soars Over 9.3% in 24 Hours
Notably, XRP was currently changing hands above $0.60 at the time of writing. According to data from CoinGecko, XRP was trading at $0.68, up over 9.3% in the past day.
Using the Second Circuit decision as a legal precedent for the upcoming remedies phase in the Ripple lawsuit, the blockchain company’s fine might cover only institutional investors who bought XRP above $0.68.
The remedies stage of the SEC v. Ripple lawsuit is expected to begin soon. The court has already ordered the parties to propose a joint briefing schedule for the remedies stage no later than November 9. So far, the parties have yet to comply with the order.
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.
-Advertisement-
