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Pro-XRP Lawyer Outlines Potential Ripple-SEC Settlement Amid Coinbase Legal Battle

Deaton emphasized the importance of the ongoing legal battle between Coinbase and the SEC.

Amid ongoing speculation regarding a potential resolution between Ripple and the United States Securities and Exchange Commission (SEC),

John Deaton, a prominent advocate for XRP and proponent of its legality, has outlined potential steps that Ripple and the SEC might take if they decide to pursue a settlement.

Deaton emphasized the importance of the ongoing legal battle between Coinbase and the SEC.

He pointed out that if the judge overseeing the Coinbase case grants the exchange’s motion to dismiss, it could establish a precedent indicating that token sales conducted on exchanges might not fall under U.S. securities regulations.

However, Deaton clarified that such a ruling would not necessarily apply to cryptocurrency staking activities.

In his analysis, Deaton stated, “The only plausible scenario for a Ripple-SEC settlement before year-end would be if Judge Failla endorses the Coinbase motion or partially approves it, signifying that token sales executed on an exchange, involving blind bid/ask transactions, may not be subject to U.S. securities regulations.”

Should the motion to dismiss receive approval, the SEC’s ability to pursue an appeal would be substantially limited, making a settlement a pragmatic consideration.

Deaton further explained that even if the SEC were to pursue an appeal in this context, its regulatory authority would likely be diminished.

READ MORE: Ripple Challenges SEC’s Appeal Bid, Asserting Insufficient Grounds in Ongoing Lawsuit

In a recent filing on September 1, Ripple indicated that the summary judgment failed to adequately address the legal foundation for an interlocutory appeal.

Ripple’s opposition to the judgment was rooted in its argument that the SEC had deviated from established legal norms, particularly with regard to applying the Howey test to determine whether XRP token sales qualify as securities.

The SEC had originally filed a lawsuit against Ripple, CEO Brad Garlinghouse, and co-founder Chris Larsen in December 2020, triggering several exchanges to delist XRP to avoid potential legal liabilities.

However, a favorable ruling by Judge Analisa Torres in July led numerous exchanges to express their intentions to relist the XRP token.

Throughout 2023, the SEC has pursued various cryptocurrency firms over allegations of securities violations, including notable names like Binance and Coinbase.

Notably, on August 29, asset manager Grayscale achieved a legal victory against the SEC through an appeal, compelling a reevaluation of its application for a Bitcoin exchange-traded fund in the spot market.

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