Legal Expert John Deaton's Insight On The SEC Potential XRP Lawsuit Appeal

Pro-XRP lawyer John Deaton agrees with the possibility of the SEC appealing directly soon. However, he adds that there won’t be an immediate appeal due to the ongoing debate on whether the United States SEC has the authority to do so at this moment. It’s important to note that the rejection of this case by the SEC doesn’t aim to expedite the appeal process.

On Oct 21, John E. Deaton took part in a discussion within the cryptocurrency community regarding the possibility of the U.S. SEC immediately appealing against Ripple after dropping charges against Ripple executives. This relates to the reasoning behind the SEC’s decision to withdraw their allegations against Chris Larsen, who serves as both executive chairman and CEO of Ripple.

Deaton indicated that the April 2024 trial has been canceled because the SEC voluntarily dropped its allegations against Ripple CEO Brad Garlinghouse and executive chairman Chris Larsen. It was mentioned that the completion of the case’s penalty phase is necessary before the SEC can potentially file an appeal.

Ran is correct in predicting that the SEC will likely appeal soon due to their decision to drop the case against @bgarlinghouse and @chrislarsensf since the April 2024 trial has been canceled. However, she is mistaken in claiming that the SEC can initiate an appeal immediately.

SEC Abandons Ripple Executives Case Due To Lack Of Evidence

Deaton emphasized the public release of the summary judgment ruling in Nov 2022, citing the LBRY litigation. It took eight months for the appeal to be granted after the decision was made. Consequently, on Sept 7, following the additional discovery that included interrogations and requests for document production, LBRY filed an appeal. The SEC reduced the sanctions from $23 million to $130,000.

There is an ongoing litigation involving Ripple, with the SEC seeking a total of $770 million. As per Deaton, Ripple’s argument will revolve around the exclusion of ODL transactions and reasonable business expenses from this amount.

The SEC is unlikely to appeal the case against Ripple executives accused of aiding and abetting, as there is insufficient evidence. The regulator dismissed the case, stating that it lacked supporting proof. “Deaton mentioned that the witness list, including subpoenas for certain individuals to testify, would be intriguing.”

In response to the SEC’s case against Ripple executives being invalidated, the company’s lawyer sent a letter to Judge Torres. The letter sought a potential briefing schedule for addressing unresolved issues after Nov 9.

Ripple seeks remedies for its institutional XRP sales violations, which fall under Section 5 of the securities legislation. Recent events have increased the likelihood of a settlement. However, Ripple remains determined to contest the lack of jurisdiction that the SEC claims over the cryptocurrency sector.

The author’s views are for reference only and shall not constitute any investment advice. Please ensure you fully understand and assess the products and associated risks before purchasing.