Lawyer Outlines Ripple-SEC Settlement Path Amid Coinbase Case Impact – In light of the ongoing discussions about a potential agreement between Ripple and the United States Securities and Exchange Commission (SEC), attorney John Deaton, who supports XRP, and represents a considerable number of XRP tokenholders, has outlined the potential courses of action that might be taken if they choose to settle.
Deaton emphasized the importance of the current lawsuit involving Coinbase and the SEC. He clarified that if the judge overseeing the Coinbase case approves the exchange’s request for dismissal, it would signal that token sales on the platform do not fall under U.S. securities regulations. Nevertheless, this ruling would not extend to crypto staking.
He explained: “The only way Ripple and the SEC (could) settle before the end of the year is if Judge Failla grants the Coinbase motion to dismiss or partially grants it – finding token sales on an exchange in a blind bid/ask transaction do not fall under U.S. securities laws” If the motion to dismiss is granted, it would significantly limit the SEC’s ability to pursue an appeal, which would make opting for a settlement a sensible choice.
Deaton clarified that even if the option for an appeal remained, the SEC’s power in such a scenario would be diminished. In a filing dated September 1, Ripple pointed out that the summary judgment did not address the legal foundation for the interlocutory appeal. Their opposition was based on the argument that the SEC had deviated from the established legal standpoint, particularly concerning the application of the Howey test to XRP token sales.
The SEC initiated a lawsuit against Ripple, CEO Brad Garlinghouse, and co-founder Chris Larsen in December 2020, leading to the removal of XRP from several exchanges to avoid potential legal complications. However, following a favorable ruling by Judge Analisa Torres in July, many exchanges expressed their intention to reintroduce the token.
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During 2023, the SEC has taken legal action against several cryptocurrency companies, such as Binance and Coinbase, alleging securities violations. On August 29, asset manager Grayscale achieved a legal triumph over the SEC when an appeal compelled a review of its application for a spot Bitcoin exchange-traded fund (ETF).