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Ripple advocate John Deaton commented on the legal process between Ripple and the U.S. Securities and Exchange Commission (SEC). According to Deaton, this legal process will continue to be on the agenda for another year. The famous figure also claimed that a possible settlement could only be considered if Coinbase‘s request to dismiss the case filed against it by the SEC is successful.
Proposal for Settlement from a Prominent Figure
In a detailed post on the subject, Deaton criticized the fact that no serious settlement discussion was held between Ripple executives and SEC officials. The famous figure drew attention to the SEC’s request for a $770 million penalty and highlighted the complexity of the penalty stage, which involves various legal processes:
“I don’t believe that there has been a single serious discussion about a settlement between Ripple, Brad Garlinghouse, Chris Larsen, and the SEC. The SEC is angry and embarrassed and is demanding a $770 million penalty.”
Deaton explained that the penalty stage is a detailed legal process similar to a second lawsuit, involving statements, document requests, emails, financial records, contracts, and liquidity-dependent (ODL) transactions.
Will the SEC Reduce the Penalty?
Deaton suggests that Ripple could aim to reduce the $770 million penalty by excluding ODL transactions and reducing additional expenses. He points to the LBRY case where the SEC initially demanded $23 million but settled for a penalty of $130,000 after an eight-month trial. Deaton made the following comment regarding a timeline:
“I don’t expect Judge Torres’ final decision to be issued until at least the end of summer. The process of filing an appeal in this case could take a full year.”
Deaton associates Ripple’s legal battle with the case Coinbase is facing against the SEC, stating that if the exchange is successful in its request for dismissal, the SEC’s stance on the cryptocurrency sector could change, and a settlement could be reached with Ripple. However, if Coinbase fails in this step, it may not be possible to reach any settlement with the SEC.
Discussions regarding Coinbase’s request will take place on January 17, 2024, and a decision is expected to be made within 60-120 days after this meeting. Ripple’s attempt to reduce the $770 million penalty during this period will lead to significant legal costs.
