Renowned pro-Ripple lawyer John Deaton has cast doubt on the prospects of a settlement in the XRP lawsuit.
In a Thursday episode on the CryptoLaw YouTube channel, Deaton characterized the present legal phase as “scorched Earth litigation,” indicating a contentious and prolonged legal battle between the Securities and Exchange Commission (SEC) and Ripple.
Deaton further expressed skepticism about the likelihood of a swift settlement, suggesting the parties could wait for a formal ruling by the Judge, bringing the long-drawn court battle to a close.
He acknowledged, however, that the dynamics could change if a ruling is imminent, prompting the SEC to pursue negotiations for a more favourable resolution instead of potentially facing another unfavourable outcome.
“I don’t think there’s any talks of settlement and I’ve said that for a long time now [but] that doesn’t mean it won’t happen… the SEC thinks that they can get more from Ripple in a settlement than [the judge] might rule. Maybe that’ll make them come to the table because then they can spin it versus getting another ruling that embarrasses them as an organization.” Said Deaton.
Regarding the potential fines Ripple might face, Deaton suggested that it could range from $10 million to $100 million, emphasizing the SEC’s fear of a scenario where their extensive litigation results in a comparatively minor penalty. He also emphasized the judge’s awareness of the SEC’s lack of clarity and confusion surrounding crypto regulations.
Notably, industry experts have anticipated a settlement in April, following a court order issued in November, directing the parties to submit their remedies-related briefs by April 12, 2024. However, while it’s unclear if a settlement could happen, chatter suggesting that it might accelerate the SEC’s appeal process has also emerged.
Addressing the appellate process, Deaton stated that he would file an amicus brief in the Second Circuit Court of Appeals if there were an appeal. According to him, the intended class-action lawsuit against the SEC was to obtain further regulatory clarity rather than seek damages. Notably, Deaton’s objective stands, even in light of the court’s ruling last July, which granted XRP holders the sought-after legal clarity by determining that XRP is not a security.
As the lawsuit unfolds, there is a shared anticipation within the cryptocurrency community for a more expeditious resolution. Certain voices in the community contend that the protracted legal proceedings adversely impact the value of XRP, which has demonstrated notable weakness over the past year, contrasting with the impressive growth observed in other cryptocurrency assets.
Notably, XRP continued to show weakness after dropping below the closely watched $0.55 support late last month. The crypto asset was trading at $0.50 at press time, reflecting a 0.05% surge over the past 24 hours.