The SEC vs. Ripple lawsuit has been a topic of great interest in the crypto community. With the summary judgment yet to be issued, rumors continue to spread about the potential direction the litigation could take. Recently, a Twitter account named Blockchain Daily tweeted that Ripple and the SEC are reportedly holding a meeting on May 8th, aimed at purporting a possible settlement between Ripple and the SEC. However, lawyer and amicus curiae in the SEC-Ripple lawsuit, John E. Deaton, was quick to respond to the rumor.
In his rebuttal, Deaton stated that the settlement is only possible once the Judge Analisa Torres issues the summary judgment, in which Ripple emerges as a clear victor. Deaton opined that only then will the SEC Chairman Gary Gensler move to settle with Ripple as the settlement in that situation would give Gensler the opportunity to claim the political victory. Deaton added that ‘because of claims of market manipulation and insider trading, they wouldn’t set a meeting and run the risk of a leak and influence the market.’ The lawyer suggested that if settlement is to take place, the parties will just meet to settle the issues, if possible, and report the settlement to the court.
Deaton reiterated that if the SEC and Ripple lawyers would ever wish to have a meeting, they would do so as they desire. He denied the logic of them first picking a date a week from now only to leak it out. Deaton considered the rumor a stunt to artificially pump XRP’s price upwards.
Addressing the query concerning the potential settlement between the parties in case Ripple wins the lawsuit, Deaton responded that if Ripple wins, the settlement would depend on the nature of the decision and its repercussions. If Coinbase and Kraken would wait for an appeal or they will relist XRP right away. Deaton stated that Ripple will likely strike the settlement with the SEC if the regulator agrees that all the future XRP sales would not be considered securities and that they will not file the appeal.
The lawsuit was filed by the SEC against Ripple in December 2020, accusing the blockchain firm and its executives of conducting a $1.3 billion unregistered securities offering via the sale of XRP. The lawsuit has been a long-standing issue, with Ripple claiming the lawsuit affects only the company, not the cryptocurrency XRP itself. Ripple also argued that XRP is not a security but a cryptocurrency and that it has been treated unfairly by the SEC.
The SEC, in its complaint, claimed that Ripple had conducted a “scheme to raise hundreds of millions of dollars through sales of unregistered XRP securities” and accused Ripple of seeking to support XRP’s price and create the impression of its liquidity by engaging in “flippers’ incentives programs”.
The case involves complex legal issues around securities law and is expected to set a precedent for how cryptocurrencies are classified in the United States. The case has been watched closely by the crypto industry and is seen as a decisive moment for the future of XRP.
Ripple and XRP have seen support from some influential figures in the crypto industry, with Michael Arrington, the founder of Arrington XRP Capital saying, “I think in the end, Ripple will be vindicated in this lawsuit, and XRP will continue to thrive.”
However, the lawsuit has had a significant impact on the XRP price, with the cryptocurrency’s value plummeting shortly after the case was filed. The value of XRP dropped by almost 70% in the weeks after the lawsuit was filed, and many cryptocurrency exchanges suspended trading of the asset.
In conclusion, it remains to be seen what direction the lawsuit takes, and whether Ripple will emerge as the victor. The case has been contentious with both parties presenting compelling arguments. The outcome of this case is likely to have a significant impact not only on Ripple and XRP but also on how cryptocurrency is treated in the United States in the future. While Deaton’s opinion might not be accurate, it is an indication that the crypto community is waiting anxiously for the summary judgment.
