Pro-Ripple lawyer predicts prolonged legal battle, hints at settlement factors
John Deaton says there has not been “a single serious conversation” about a potential settlement between Ripple, Brad Garlinghouse, Chris Larsen and the SEC.
Pro-Ripple lawyer John Deaton has said he expects a lengthy legal process for the Securities Exchange Commission (SEC) v Ripple case, possibly lasting a year. Deaton suggests that a settlement may only be considered if Coinbase’s motion to dismiss (MTD) the SEC’s case against it is successful.
In a detailed post on X (formerly known as Twitter), Deaton discussed the lack of serious settlement talks between Ripple, its executives and the SEC. He mentioned the SEC’s desire for a $770 million penalty and explained the complexities of the penalty phase involving various legal processes.
In his words,
“I do not believe there has been a single serious conversation regarding a settlement between Ripple, Brad Garlinghouse, Chris Larsen and the SEC. The SEC is pissed and embarrassed and wants $770M worth of flesh,”.
He explained that the penalty phase is a detailed process, akin to a second legal case, involving depositions, document requests, emails, financial records, contracts and on-demand liquidity (ODL) transactions. Deaton suggests that Ripple might aim to reduce the $770 million penalty by excluding ODL transactions and cutting down on additional expenses. He points to the LBRY case where the SEC initially pursued $23 million, but after eight months of litigation, it led to a $130,000 fine.
As I said on @CryptoLawUS TV yesterday with @attorneyjeremy1 and Thien-Vu, I do not believe there has been a single serious conversation regarding settlement between @Ripple @bgarlinghouse @chrislarsensf and the @SECGov.
The SEC is pissed and embarrassed and wants $770M worth… https://t.co/kcXvsrPgaa
— John E Deaton (@JohnEDeaton1) October 25, 2023
Creating a timeframe, he commented,
“I don’t expect a final judgment, issued by Judge Torres, until late summer, at the earliest. It literally could take a full year before an appeal is filed in this case.”
Deaton connected Ripple’s case outcome with another significant lawsuit, stating that if Coinbase succeeds in its motion to dismiss, the SEC may shift its stance on cryptocurrencies and consider a settlement with Ripple. However, if Coinbase’s MTD fails, he foresees no settlement.
Related: Coinbase disputes SEC’s crypto authority in final bid to toss regulator’s suit
The oral argument for Coinbase’s motion is scheduled for Jan. 17, 2024, with a decision likely to follow within 60-120 days. Ripple is expected to face considerable legal costs during this period as it strives to reduce the $770 million penalty. It’s possible that the Coinbase case could become a factor in the SEC’s efforts to postpone the final ruling on Ripple, aligning with Deaton’s late summer timeline.
Magazine: Crypto regulation: Does SEC Chair Gary Gensler have the final say?
