Prominent figures in the crypto community have continued to give their takes on why and how a settlement between Ripple and the US Securities and Exchange Commission (SEC) is likely to happen. This time around, Crypto influencer Zach Rector has stated why he believes a “settlement is guaranteed.”
In a tweet shared on his X (formerly Twitter) platform, Rector stated that both parties are “100%” likely to settle before the case goes to trial as the SEC won’t want Ripple to call witnesses like the “Ethereum ICO Insider” Steven Nerayoff. This is because Nerayoff recently came forward to detail how Ethereum got preferential treatment during its Initial Coin Offering (ICO).
According To Rector, Nerayoff’s claims vindicate members of the XRP community who had postulated the ‘Ethereum Free Pass’ theory. This theory is based on the premise that key SEC figures had ties to Ethereum, and that was why the cryptocurrency didn’t face any regulatory scrutiny like the one Ripple is facing despite running the world’s first ICO.
For one, the Enterprise Ethereum Alliance, which was founded in 2017, had Simpson Tha Cher & Bartlett as one of its members, and this was the firm that former SEC Director William Hinman worked for before he joined the SEC. This may have influenced Hinman to give his famous speech where he stated that Ether was not a security.
There is also the belief that the SEC may have targeted Ripple at the time because XRP was a direct competitor to ETH, with both tokens occupying the position of 2nd and 3rd largest cryptocurrencies by market cap.
With key witnesses like Nerayoff, Rector believes Ripple is well-positioned not only to win but also to destroy the SEC’s credibility (something which the SEC will be looking to avoid). As such, the SEC will be looking to settle before the case goes to trial.
This position is also similar to when pro-XRP legal expert Fred Rispoli mentioned that the SEC won’t want to drag Ripple’s founders through a trial as there is the likelihood of former SEC Chair Jay Clayton and former SEC Director William Hinman being called to the witness stand. He reasoned that statements from this duo could bring the SEC’s credibility into question.
Steven Nerayoff happens to have actively participated in Ethereum’s ICO. As such, any testament from him can really hamper the SEC’s case. Interestingly, Nerayoff is believed to be one of those who lobbied the SEC to give Ethereum a regulatory ‘free pass’ during the period the SEC was clamping down on crypto projects for selling unregistered securities.
On September 17, Nerayoff released a tweet where he suggested that there were some irregularities in Ethereum’s ICO of which the SEC seems to be directly implicated. He further stated that he “might” have evidence to prove these irregularities.
Meanwhile, pro-XRP lawyer John Deaton stated that Nerayoff’s statement clearly proves that the ‘Ethereum Free Pass’ isn’t a myth and that the only thing that the community had lacked before now, to prove this theory was “a true insider who was there, and knows everything and has the receipts to prove it.”
According to him, if Nerayoff truly knows where the “bodies are buried” and has the map “showing the location,” then things (probably in reference to the SEC vs. Ripple case) are “about to get real interesting.”
The ongoing legal battle between Ripple and the SEC has been closely watched by the crypto community. Many believe that a settlement is the most likely outcome, given the potential implications of a trial and the mounting evidence of preferential treatment for Ethereum during its ICO. If a settlement is reached, it could have significant implications for the future regulation of cryptocurrencies.
In conclusion, the likelihood of a settlement between Ripple and the SEC is high, according to crypto influencer Zach Rector. The recent revelations by Steven Nerayoff about the preferential treatment given to Ethereum during its ICO further support the theory that the SEC targeted Ripple due to its competition with Ethereum. With key witnesses like Nerayoff, Ripple is well-positioned to win the case and potentially damage the SEC’s credibility. Overall, a settlement would be a significant development in the crypto industry and could impact future regulatory decisions.