Amid speculation about a possible settlement between Ripple and the U.S. Securities and Exchange Commission (SEC), pro-XRP attorney John Deaton, who represents numerous XRP (XRP) token holders, outlined what would happen if the parties chose to Solutions, steps that both sides may take to settle.
Deaton highlight Implications of the ongoing Coinbase vs. SEC lawsuit. He explained that if the judge in the Coinbase case grants the exchange’s motion to dismiss, it would show that the exchange’s token sales are not subject to U.S. securities laws. However, it does not work with cryptocurrency staking.
“The only way Ripple and the SEC can reach a settlement before the end of the year is if Judge Failla grants Coinbase’s motion to dismiss or grant in part — a blind buy-sell transaction on the exchange that finds token sales not falling under U.S. securities laws.”
If the motion to dismiss is granted, the SEC’s ability to appeal would be considerably limited, making settlement a logical option. Deaton clarified that even if an appeal were possible in this case, the authority of the agency would be weakened.
the only way @ripple and @SECGov Settlement by the end of the year if Judge Faira approves @coinbase MTD (or grant it in part – token sales on exchanges found in blind buy/sell transactions are outside the scope of US securities laws, but allow staking components… https://t.co/0KzGT1l0OI
— John E. Deaton (@JohnEDeaton1) September 2, 2023
In a Sept. 1 filing, Ripple said the summary judgment did not address the legal basis for the interlocutory appeal. The root of its opposition is that the agency has deviated from established legal perspectives, particularly with regard to the application of the Howey test to XRP token sales.
The U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Ripple, its CEO Brad Garlinghouse, and co-founder Chris Larsen in December 2020, leading to several Exchanges delist XRP to avoid potential legal disputes. However, following the positive ruling by Judge Analisa Torres in July, a number of exchanges have indicated their intention to relist the token.
related: Ripple Legal Team Opposes SEC’s Appeal of XRP Decision
In 2023, the SEC pursued several cryptocurrency companies, including Binance and Coinbase, for alleged securities violations. On Aug. 29, asset manager Grayscale won a legal victory against the SEC in an appeal calling for a review of its application for a spot bitcoin exchange-traded fund.
Magazine: Get Your Money Back: The Weird World of Crypto Litigation