Attorney Deaton says the potential of Ripple-SEC settlement hinges on the Coinbase lawsuit outcome, impacting crypto staking, and may limit SEC’s appeal options.
In the world of cryptocurrency, as speculation swirls about a possible agreement between Ripple and the United States Securities and Exchange Commission (SEC), attorney John Deaton, who advocates for numerous XRP token holders, has delineated the potential courses of action the parties could pursue in the event of a settlement.
The outcome of the ongoing Coinbase vs. SEC lawsuit looms large over the Ripple-SEC case. Attorney Deaton emphasizes its significance, suggesting that if the judge rules in favor of Coinbase’s motion to dismiss, it could signify that token sales on exchanges may not fall under U.S. securities laws. However, crypto staking remains a legal focal point.
If the motion to dismiss is granted, the SEC’s capacity for pursuing an appeal would be notably restricted, rendering settlement a more attractive choice. Deaton emphasizes that the agency’s jurisdiction would be considerably reduced under these circumstances even if an appeal remains feasible.
Ripple’s Legal Challenge And Crypto Regulation Shift
In a recent report dated 1st September, Ripple clarified that the Summary Judgment did not adequately address the legal underpinnings for an interlocutory appeal. Ripple’s opposition centered on the assertion that the SEC had strayed from established legal norms, particularly concerning the application of the Howey Test to XRP token sales.
The SEC launched its legal offensive against Ripple, its CEO Brad Garlinghouse, and co-founder Chris Larsen in December 2020, prompting several exchanges to delist XRP to avoid potential legal entanglements. However, following the Torres ruling, many of these exchanges have expressed their intent to relist XRP or explore this possibility soon.
In 2023, the SEC extended its regulatory reach to various cryptocurrency firms, including Binance and Coinbase, as it continues investigating alleged securities violations. Notably, on August 29, asset manager Grayscale achieved a legal victory against the SEC, securing an appeal that mandates a reevaluation of its application for a spot Bitcoin exchange-traded fund (ETF). This development further underscores the evolving landscape of cryptocurrency regulations and enforcement.