After news of a potential settlement in the SEC vs. Ripple lawsuit surfaced, some members of the XRP community are seeking clarification regarding a recent legal analysis conducted by John E. Deaton, founder of CryptoLaw.
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Deaton Clarifies Stance on Settlement Rumors
To provide context, attorney John E. Deaton recently refuted a settlement rumor that is currently circulating within the XRP community. The rumor claims a settlement between the SEC and Ripple has been scheduled for May 8, but Deaton debunked this claim through a tweet from the crypto news outlet Blockchain Daily.
Furthermore, Deaton has expressed his belief that the report of a scheduled settlement between the SEC and Ripple is false. He believes a settlement will only be reached after Judge Analisa Torres has ruled. Deaton also stated that the SEC would only show interest in a settlement if Ripple achieves a significant victory. He further explained that a settlement would help SEC Chair Gary Gensler save face and secure a political victory for the agency.
Related Reading: Ripple’s XRP Markets Update Provides Insight into SEC Legal Battle
XRP Community Members Seek Clarification
Deaton’s comment that a settlement would only happen if Ripple achieves a significant victory has raised questions in the XRP community about why Ripple would still want to settle with the securities regulator if it wins the lawsuit. Many members of the community are seeking clarification on this matter.
Deaton’s Reply
Attorney Deaton responded to the XRP community’s question by explaining why Ripple might still want to settle with the SEC even after winning the lawsuit. He clarified that his previous analysis did not imply that Ripple would accept the same settlement terms it would have accepted two years ago.
He clarified his previous tweets by posing rhetorical questions. He asked whether major crypto exchanges such as Coinbase and Kraken would promptly relist XRP or wait for the SEC to appeal if Ripple wins the lawsuit.
He also questioned whether Bank of America would be satisfied with Judge Torres’ decision or prefer to wait and see if the SEC would overturn her ruling on appeal.
“If the SEC told Ripple it would issue a statement that all future sales of XRP are not securities (not saying it would) and not appeal if Ripple agrees to pay $50M, I believe the certainty and immediate return of liquidity to the U.S., makes @bgarlinghouse a check in seconds,” Deaton noted.
Related article: Ripple’s XRP Escrow Scheme: Move 500 Million, Lock 700 Million Tokens
According to Deaton, it would be a different scenario if Judge Torres rules in Ripple’s favor. He explained that if the ruling is in Ripple’s favor, liquidity would be restored to the US, and businesses would not have to worry about the SEC when using XRP.
Hogan’s Perspective On SEC’s Appeal
However, Attorney Jeremy Hogan, who is a partner at Hogan & Hogan, had earlier said that the SEC would not file an appeal if Ripple wins the summary judgment in its favor.
Hogan has previously stated that an appeal filed by the SEC in the Ripple lawsuit would not be advantageous for the regulator. Hogan stated that if the case goes to the Second Circuit in the Appellate Court and the SEC still loses, the decision will become a binding precedent.
Attorney Hogan is of the opinion that if the SEC appeals the decision in the Ripple lawsuit and still loses at the Second Circuit in the Appellate Court, it will set a binding precedent that could negatively impact the SEC’s chances of winning similar cases against other cryptocurrency companies in the future.
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