Pro-Ripple lawyer John Deaton has said he expects a lengthy legal process for the Securities Exchange Commission (SEC) v Ripple case, possibly lasting a year. Deaton suggests that a settlement may only be considered if Coinbase’s motion to dismiss (MTD) the SEC’s case against it is successful.
In a detailed post on X (formerly known as Twitter), Deaton discussed the lack of serious settlement talks between Ripple, its executives and the SEC. He mentioned the SEC’s desire for a $770 million penalty and explained the complexities of the penalty phase involving various legal processes.
In his words,
As I said on @CryptoLawUS TV yesterday with @attorneyjeremy1 and Thien-Vu, I do not believe there has been a single serious conversation regarding settlement between @Ripple @bgarlinghouse @chrislarsensf and the @SECGov.
The SEC is pissed and embarrassed and wants $770M worth… https://t.co/kcXvsrPgaa
— John E Deaton (@JohnEDeaton1) October 25, 2023
He explained that the penalty phase is a detailed process, akin to a second legal case, involving depositions, document requests, emails, financial records, contracts and on-demand liquidity (ODL) transactions. Deaton suggests that Ripple might aim to reduce the $770 million penalty by excluding ODL transactions and cutting down on additional expenses. He points to the LBRY case where the SEC initially pursued $23 million, but after eight months of litigation, it led to a $130,000 fine.
Creating a timeframe, he commented,
Deaton connected Ripple’s case outcome with another significant lawsuit, stating that if Coinbase succeeds in its motion to dismiss, the SEC may shift its stance on cryptocurrencies and consider a settlement with Ripple. However, if Coinbase’s MTD fails, he foresees no settlement.
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The oral argument for Coinbase’s motion is scheduled for Jan. 17, 2024, with a decision likely to follow within 60-120 days. Ripple is expected to face considerable legal costs during this period as it strives to reduce the $770 million penalty. It’s possible that the Coinbase case could become a factor in the SEC’s efforts to postpone the final ruling on Ripple, aligning with Deaton’s late summer timeline.
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