Attorney John Deaton, who represents XRP holders, has made a persuasive case in the Ripple vs. SEC, suggesting that the anticipated return of $770 million to Ripple is unlikely. He bases his prediction on several influential factors that could influence the court's ruling.
Deaton underscores the importance of the Supreme Court's Morrison ruling, which effectively limits the SEC's jurisdiction to sales within the United States. This gains relevance as Ripple's XRP sales in the United Kingdom, Japan, Switzerland and other areas face scrutiny. Furthermore, the legal personality of XRP in these jurisdictions it reinforces Ripple's position.
I'll deal with this on Tuesday. @CryptoLawUS live broadcast. @Vibe He will pay much less than $770 million.
The Supreme Court ruled that the refund is not punitive in nature and cannot exceed the โnet profitsโ of the sales. A business can deduct legitimate business expenses. @bgarlinghouse andโฆ https://t.co/jDkOfouj1w
- John E. Deaton (@JohnEDeaton1) November 11, 2023
For example, regulatory bodies such as the Financial Conduct Authority (FCA) in the United Kingdom and the Financial Services Agency (FSA) in Japan have not classified XRP as a security. This classification is crucial as it allows for the legal continuation of XRP sales in these regions, posing a challenge to the SEC's pursuit of the return of these global transactions.
Furthermore, Deaton emphasizes that the legal action against Ripple does not focus on fraud but rather constitutes a regulatory disagreement. This differentiation is fundamental as it redirects attention from punitive measures to regulatory compliance. Since a substantial portion of XRP sales are made outside the US and involve accredited investors, the return potential decreases significantly. Excluding sales outside the United States, which may constitute more than 90% of total sales, and sales to accredited investors, Deaton estimates a substantial reduction in the potential refund amount.
Related: Cryptocurrency Lawyer Says $20M Settlement Represents 99.9% Profit for Ripple
Furthermore, the lawyer highlights that the majority of institutional sales of XRP have not resulted in damages, as the current price of XRP exceeds levels during those sales, indicating a lack of losses for investors. Deaton also highlights the rapid nature of on-demand liquidity (ODL) transactions with XRP, which occur within seconds, reducing the potential for harm to investors. Interestingly, accusations of harm are directed more at the SEC than at Ripple, particularly among the 75,000 XRP. Headlines participate in legal action.
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