SEC Demands $700 Million Settlement From Ripple, Pro-XRP Lawyer Reveals Next Steps

The US Securities and Exchange Securities Commission (SEC) and Ripple Labs are expected to proceed to finalize a settlement following the official dismissal of the former’s claims against Ripple’s CEO Brad Garlinghouse and its co-founder Chris Larsen. In line with that, pro-XRP legal expert John Deaton has revealed how the settlement will play out. 

A Settlement Isn’t Going To Be Straightforward

In a post shared on his X (formerly Twitter) platform, Deaton mentioned that he doesn’t believe “there has been a single serious conversation regarding settlement” between the SEC and Ripple alongside its executives. He said that the Commission is “pissed and embarrassed and wants $770M” as a fine for Ripple’s violation of securities laws.

He further noted that the penalty phase isn’t as straightforward as some may think, as it is “like a second case” but one that requires more depositions, interrogatories, requests for the production of documents, emails, bank statements, contracts, and ODL transactions. 

The process is also made more difficult as while the SEC is insistent on a $770 million fine, Ripple wants to “drastically reduce” the figure, as Deaton stated. To achieve this, Ripple will be looking to exclude the ODL transactions, which the SEC may claim are under institutional sales that violated securities laws. 

Deaton also alluded to the SEC’s case against the decentralized content-sharing platform LBRY, which took “eight months of additional litigation” before the Judge ordered that the platform pay a fine of $111,614 to the Commission. That case was also not straightforward as both parties had to file multiple briefs again, and depositions were taken. 

How The SEC’s Case Against Ripple Could Play Out

As to when a final judgment could come from Judge Analisa Torres, Deaton doesn’t foresee one until late summer “at the earliest.” With that in mind, he mentioned that it could take a full year before the SEC (or even Ripple) gets the chance to file an appeal in this case. 

The lawyer once again mentioned the role that Coinbase’s Motion To Dismiss (MTD) could play in this case and a potential settlement. He said that the SEC “will be forced to pivot its anti-crypto agenda and then work out a possible settlement with Ripple” if Judge Failla grants the motion. 

However, a settlement is unlikely if the crypto exchange were to lose its MTD. Coinbase is asking the judge to dismiss the SEC’s case against it, arguing that the Commission doesn’t have jurisdiction over its activities. Hearing of Coinbase’s oral argument is slated for January 17, 2024, with a ruling likely to come within 60 to 120 days after. 

XRP drops to $0.54 | Source: XRPUSD on Tradingview.com

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