Amid speculation about a possible settlement between Ripple and the U.S. Securities and Exchange Commission (SEC), attorney John Deaton, who represents numerous XRP token holders, outlined possible steps the parties could take if they chose to settle.
Deaton Attorney Talks About Factors That Could Affect Potential Settlement Between Parties tip Clarify the significance 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, although the cryptocurrency collateral aspect would still be part of the legal process.
He explained in the post,
“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 not covered by US securities laws, but pledged components are allowed… https://t.co/0KzGT1l0OI
— John E. Deaton (@JohnEDeaton1) September 2, 2023
In its Sept. 1, 2023, filing, Ripple said the summary judgment did not address the legal basis for the interlocutory appeal. Their opposition stems from the agency’s departure from an established legal perspective, 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, CEO Brad Garlinghouse, and co-founder Chris Larsen in December 2020, resulting in multiple transactions XRP was delisted to avoid potential legal disputes. However, following the Torres ruling, many exchanges expressed their intention to relist the token or explore this possibility in the future.
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 (ETF).
Magazine: Get Your Money Back: The Weird World of Crypto Litigation
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