Amidst ongoing speculation surrounding a possible resolution between Ripple and the United States Securities and Exchange Commission (SEC), attorney John Deaton, a staunch advocate for the pro-XRP camp, has outlined potential courses of action that may unfold if the two parties decide to reach a settlement.
Drawing attention to the ongoing legal battle between Coinbase and the SEC, Deaton underscored the significance of the situation.
He elucidated that should the judge presiding over the Coinbase case grant the motion to dismiss put forth by the exchange, it would signal that transactions involving tokens on the platform aren’t subject to U.S. securities regulations.
It’s important to note, however, that this ruling would not extend to crypto staking activities.
In his words:
“The scenario in which Ripple and the SEC could potentially settle before the year’s end hinges on Judge Failla granting Coinbase’s motion to dismiss or partially granting it.
This would involve a determination that token sales occurring on an exchange through blind bid/ask transactions fall outside the purview of U.S. securities laws.”
Should the motion to dismiss receive approval, the SEC’s scope for pursuing an appeal would be substantially limited, thereby making the prospect of a settlement a plausible option.
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Deaton further clarified that even if the possibility of an appeal remained viable in such circumstances, the agency’s authority would be significantly curtailed.
Ripple’s recent filing on September 1 revealed that the summary judgment had not adequately addressed the foundational basis for an interlocutory appeal.
The opposition from Ripple stemmed from the argument that the SEC had deviated from established legal interpretations, particularly in relation to the application of the Howey test to sales of XRP tokens.
In December 2020, the SEC launched a lawsuit against Ripple, its CEO Brad Garlinghouse, and co-founder Chris Larsen, resulting in the removal of XRP from several exchanges to preempt potential legal ramifications.
However, a favorable ruling by Judge Analisa Torres in July prompted numerous exchanges to express their intentions to relist the XRP token.
Throughout 2023, the SEC has pursued various cryptocurrency firms on allegations of violating securities regulations, including prominent entities such as Binance and Coinbase.
Recent developments saw asset management company Grayscale achieve a legal victory over the SEC through an appeal, compelling a reevaluation of its application for a Bitcoin exchange-traded fund.
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