In the ongoing legal face-off between Ripple and the U.S. Securities and Exchange Commission (SEC), Attorney John Deaton, a representative of XRP holders, has introduced a compelling argument that could potentially reshape the case’s outcome. His assertions, grounded in influential factors, cast doubt on the likelihood of Ripple facing the anticipated $770 million disgorgement.
Deaton’s legal strategy hinges on the Supreme Court’s Morrison ruling, a pivotal decision that curtails the SEC’s jurisdiction to sales occurring within the United States. This becomes particularly pertinent as scrutiny intensifies over Ripple’s XRP sales in regions beyond the U.S., including the United Kingdom, Japan, and Switzerland. The legal status of XRP in these jurisdictions, notably not classified as a security by entities such as the Financial Conduct Authority (FCA) in the U.K. and the Financial Services Agency (FSA) in Japan, further strengthens Ripple’s defense.
Ripple’s Charges Shift From Fraud To Regulatory Dispute
Deaton’s distinction is of utmost significance as he highlights that Ripple’s charges do not involve fraud but are a matter of regulatory disagreement. This nuanced outlook shifts the attention from punitive actions to the more comprehensive regulatory compliance issue.
Highlighting the global nature of XRP transactions, Deaton underscores the diminished potential for disgorgement. With a substantial portion of XRP sales outside the U.S. and involving accredited investors, the estimated disgorgement amount could significantly reduce, possibly exceeding 90%.
Moreover, Deaton points out that institutional XRP sales have not resulted in demonstrable harm. The current price of XRP, surpassing levels during those sales, indicates a lack of investor losses. Emphasizing the swift nature of On-Demand Liquidity (ODL) transactions involving XRP, occurring within seconds, Deaton argues that this immediacy minimizes the potential for investor harm.
Notably, accusations of harm are directed more towards the SEC than Ripple, particularly resonating among the 75,000 XRP holders actively involved in the legal proceedings. As Attorney John Deaton’s persuasive case unfolds, the landscape of Ripple’s legal battle against the SEC takes an unpredictable and potentially game-changing turn.