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- Attorney John Deaton predicts no settlement in Ripple v. SEC without favorable resolution in Coinbase case.
- SEC labels cryptocurrencies as securities in lawsuit against Coinbase, complicating potential settlement in ongoing litigation with Ripple.
The legal battle between the U.S. Securities and Exchange Commission (SEC) and Ripple Labs, Inc. has grabbed the attention of the crypto community. A recent development in this dispute involves attorney John Deaton, founder of Crypto Law, who shared his perspective on a potential settlement in this legal battle. What are the implications of his comments and how could they affect the future of Ripple and the broader banking landscape?
Is a settlement between #Ripple and the #SEC still on the table? How does Elizabeth Warren's attack on #Crypto impact settlement talks.
Attorney John Deaton shares his thoughts!
WATCH the full interview https://t.co/yJnlrBrJq8#xrp #bitcoin #altcoins #garygensler… pic.twitter.com/nmajjwpi0W
— Tony Edward (Thinking Crypto Podcast) (@ThinkingCrypto1) December 21, 2023
Deaton’s Perspective on the Ripple v. SEC Case
In a recent interview on Thinking Crypto, Deaton speculated that there will be no settlement in the Ripple case due to the SEC’s claim against other crypto projects. According to Deaton, the SEC is unlikely to settle with Ripple and accept that XRP sold on exchanges is not a security, while the commission still considers ADA, SOL and MATIC as investment contracts.
The Impact of the Coinbase Case on Ripple
The SEC labeled ADA, SOL, MATIC and more than ten other cryptocurrencies as securities in its complaints against Coinbase in June. The SEC alleged that Coinbase violated U.S. laws by operating an unregistered securities exchange and facilitating the trading of assets deemed to be investment contracts.
A month later, a federal court in New York issued a summary judgment in the Ripple case, finding that XRP itself is not a security and that Ripple’s programmatic sales and other distributions are not investment contracts, as alleged by the SEC.
Speculation about a Possible Settlement
While some legal experts speculate that the SEC could appeal the decision after the final trial, others predict that the regulator could settle with Ripple. However, Deaton, who believes the SEC is currently at war with cryptos, argued that the commission will only settle with Ripple based on the outcome of its legal dispute with Coinbase.
Key Factor for a Settlement
Deaton mentioned that there could be a settlement in the Ripple case if Coinbase wins its motion to dismiss the SEC’s charges. According to Deaton, if Coinbase wins the litigation, the court will dismiss the SEC’s claim that ADA and other cryptoassets are securities. This would facilitate a settlement between the SEC and Ripple, in which it is accepted that XRP coins traded on exchanges are not securities.
In October, Coinbase filed its final motion to dismiss the charges brought by the SEC, arguing that crypto assets traded on its platform do not constitute investment contracts.
The exchange argued that the SEC does not have the blessing of Congress to regulate an industry such as crypto. The court’s decision on the matter is expected to be issued early next year.
Meanwhile, Ripple’s case is still in the remedies stage, with proceedings scheduled to begin in February. After the court issues the final judgment, the SEC will decide whether it will settle with Ripple or challenge the summary judgment decision in the Second Circuit.
The legal situation between Ripple and the SEC, and its potential interaction with the Coinbase case, reflects a pivotal moment in the history of cryptocurrencies and their regulation. The outcomes of these cases could have far-reaching implications not only for Ripple and XRP, but also for the crypto market in general, affecting how cryptocurrencies are classified and regulated in the United States. The crypto community remains attentive to these developments, aware of their potential to shape the future of the industry.
