Predicted $770M Ripple Disgorgement Unlikely, Says XRP Holders' Lawyer
Summary:
In the ongoing Ripple vs. SEC lawsuit, Lawyer John Deaton, representing XRP holders, has argued the expected $770 million disgorgement for Ripple is unlikely, based on several influential factors. Deaton cited the international sales of XRP and their legal status in other jurisdictions which limits SEC's authority, regulatory bodies not classifying XRP as a security, and the fact that the case is more on regulatory disagreement than fraud as reasons. Furthermore, it was pointed out that most XRP sales have not resulted in harm due to its current higher price and the fast transaction times.
In the ongoing legal case between Ripple and the Securities and Exchange Commission (SEC), lawyer John Deaton, who is defending XRP owners, asserts that the speculated disgorgement of $770 million for Ripple seems unlikely. His argument is anchored on various elements that could influence the court's verdict. Deaton stresses the impact of the Supreme Court's Morrison ruling, which essentially confines the SEC's authority to sales occurring within the U.S. This becomes pertinent as Ripple's XRP sales in countries like the U.K, Japan, Switzerland and others are under examination. Furthermore, the legal status of XRP in these nations further strengthens Ripple's argument.
Moreover, the Financial Conduct Authority in the U.K. and Japan's Financial Services Agency, two prominent regulatory entities, have yet to classify XRP as a security. This classification is vital, enabling lawful continuation of XRP sales in these locales, thereby presenting a hurdle to the SEC's attempt to secure disgorgement from these worldwide transactions.
In addition, Deaton emphasizes that the lawsuit against Ripple is rooted in a regulatory dispute rather than allegations of fraud, a distinction that shifts focus away from punishment towards regulatory compliance. Given that a significant portion of XRP sales occur outside the U.S. and involve accredited investors, the potential for disgorgement significantly drops. By excluding non-U.S. sales, which could make up more than 90% of total sales, and sales to accredited investors, Deaton suggests a major drop in the alleged disgorgement figure.
Furthermore, Deaton points out that most institutional XRP sales have not resulted in harm, as the current XRP price surpasses the prices at the time of these sales, implying no investor losses. He also notes the speed of On-Demand Liquidity transactions using XRP (just a few seconds), which minimizes the potential for investor harm. Interestingly enough, most allegations of harm are directed at the SEC rather than Ripple, especially among the 75,000 XRP holders involved in the legal proceedings.
Published At
11/11/2023 8:29:08 AM
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