Why Ripple Might Pay Less than Anticipated in SEC Disgorgement

John Deaton and the Ripple SEC Saga

Lawyer John Deaton is taking a bold stance in the ongoing legal tussle between the SEC and Ripple regarding XRP. He’s predicting that Ripple won’t be writing a check for $770 million anytime soon. Why, you ask? Well, let’s dive into the factors that could sway the court’s decision.

The Morrison Ruling: A Game Changer?

One of Deaton’s key points is the U.S. Supreme Court’s Morrison ruling, which tightens the leash on the SEC by limiting its jurisdiction to sales within the U.S. This is crucial, as Ripple’s XRP is getting sold in places like the UK, Japan, and Switzerland—where regulators have not labeled it as a security. You can almost hear the SEC’s collective gasp from here!

Globally Speaking: XRP Outside the U.S.

With financial authorities like the UK’s Financial Conduct Authority and Japan’s Financial Services Agency not considering XRP a security, Ripple has a solid argument against the SEC’s claims for disgorgement. This essentially means that Ripple’s sales in those countries add layers of complications for the SEC, reducing their hope of claiming that hefty amount.

Not Fraud, Just Regulations

Deaton emphasizes that Ripple isn’t being accused of fraud, but rather of a regulatory disagreement. This is important because it shifts the focus from punishing Ripple to ensuring compliance with the law. Since most XRP sales happen outside U.S. borders, where accredited investors are buying, the SEC’s potential for a windfall looks dimer than they’d like to admit.

Institutional Sales: Not a Cause for Alarm

Interestingly enough, Deaton notes that most institutional XRP sales have not harmed investors—because the current XRP prices are well above what they were during those sales! Talk about a twist! Also, with XRP transactions through On-Demand Liquidity happening in the blink of an eye, the argument for investor harm becomes unusually weak.

Wrapping It Up: Eyes on the Future

As we await the next chapter in this saga, it’s clear many XRP holders, Deaton included, have their eyes peeled for the outcome. Who knew a legal battle could ignite such passion? The chatter is palpable, especially among the 75,000 XRP holders standing behind Deaton in this fight, pointing fingers more at the SEC than Ripple. Let’s see how this unfolds!