Attorney argues that Ripple's chances of paying full disgorgement amount are slim due to international legal standing and regulatory disagreement
The ongoing legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC) has taken a new turn, with the SEC seeking a $770 million settlement from Ripple. However, according to attorney John Deaton, who represents XRP holders in the case, the odds of Ripple having to pay this hefty sum are slim.
Deaton argues that the Supreme Court's Morrison ruling significantly influences the case. This ruling limits the SEC's jurisdiction to sales within the United States. Given that a significant portion of XRP sales happen outside the U.S., this ruling could potentially reduce the amount Ripple might have to disgorge.
The legal standing of XRP in jurisdictions like the UK and Japan also supports Ripple's position. In these regions, XRP is not considered a security, which further complicates the SEC's case. This international perspective could potentially influence the final verdict and the settlement amount.
Deaton emphasizes that the legal action against Ripple is rooted in a regulatory disagreement, not fraud. This distinction is crucial as it could impact the nature of the penalties Ripple might face. If the case were centered on fraud, the potential for disgorgement would likely be higher.
Another point Deaton highlights is that institutional XRP sales have not resulted in investor losses. This fact could play a significant role in determining the final settlement amount. The rapid nature of XRP transactions also reduces the potential for harm, further weakening the SEC's case for a high disgorgement.
While the SEC's demand for a $770 million settlement has made headlines, the final verdict is not expected until late summer 2024. In the meantime, Ripple will likely face significant legal expenses. However, based on the factors outlined by Deaton, the odds of Ripple having to pay the full disgorgement amount appear slim.
