Home Altcoins News Ripple’s Potential Reduction in SEC Penalty Spurs Optimism Among XRP Community

Ripple’s Potential Reduction in SEC Penalty Spurs Optimism Among XRP Community


In a development that has sparked optimism within the XRP community, Attorney John Deaton, a legal representative for Ripple, has presented a compelling argument for a potential reduction in the penalties that the Securities and Exchange Commission (SEC) is seeking in the ongoing SEC v. Ripple lawsuit.

Recent speculation from Deaton has shed light on the forthcoming remedies phase of the legal battle, suggesting that Ripple may not be required to pay the full $770 million fine as originally demanded by the SEC.

The $770 million penalty stems from the court’s determination that Ripple’s XRP sales to institutional clients were in violation of federal securities laws. However, Deaton’s analysis reveals that this hefty sum could see a substantial reduction.

One key factor that Deaton has pointed out in this context is the SEC’s own previous arguments. In some of its briefs, the SEC has alluded to the possibility that a significant portion, approximately 95%, of Ripple’s XRP sales might have occurred outside the United States. Applying this figure to the $770 million worth of XRP sold to institutional clients, Deaton calculates that a substantial $731.5 million could be deducted from the total, potentially leaving only $38.5 million in penalties.

Furthermore, Deaton has argued that Ripple will likely seek to offset the penalties by accounting for legitimate business expenses. This strategy could further reduce the final penalty amount, raising questions about the SEC’s ability to justify the considerable resources expended on the legal battle.

This revelation by Attorney Deaton has triggered hope among the XRP community, who believe that Ripple might secure a substantial victory against the SEC during the remedies phase. While some have claimed that the SEC’s initial victory was a 50-50 outcome, Deaton contends that it was more of a 90-10 situation in favor of Ripple.

In fact, he speculates that if Ripple manages to pay a fine of $20 million or less, the company could effectively secure a 99.9% victory against the SEC.

The SEC v. Ripple lawsuit is currently in the remedies phase, with the court having ordered both parties to submit a joint briefing schedule regarding the remedies by November 9. However, if an agreement is not reached before the deadline, they will jointly request the court to provide a schedule for the briefing.

As the deadline looms, several prominent attorneys have been speculating on potential arguments that Ripple might employ during the remedies briefing.

Attorney Jeremy Hogan, for instance, recently weighed in on the matter. Citing the SEC v. Liu case, Hogan pointed out that the court’s determination regarding disgorgement emphasized the need for fairness.

Hogan asserted that Ripple could deduct its legitimate business expenses from the potential $770 million in penalties. Additionally, he predicted that sales occurring outside the SEC’s jurisdiction, particularly those abroad, would likely be excluded from the total penalty.

He also noted that a recent Second Circuit ruling, which emphasized that disgorgement should be awarded to victims, might play a significant role during the remedies briefing. Previously, Hogan had stated that for Ripple to be held liable, XRP holders would need to demonstrate financial damages.

In summary, the ongoing SEC v. Ripple lawsuit has taken an intriguing turn, with the possibility of a significantly reduced penalty for Ripple. The analysis provided by attorneys Deaton and Hogan suggests that the remedies phase could hold further surprises and potentially favorable outcomes for Ripple and the XRP community.

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Maheen Hernandez

A finance graduate, Maheen Hernandez has been drawn to cryptocurrencies ever since Bitcoin first emerged in 2009. Nearly a decade later, Maheen is actively working to spread awareness about cryptocurrencies as well as their impact on the traditional currencies. Appreciate the work? Send a tip to: 0x75395Ea9a42d2742E8d0C798068DeF3590C5Faa5

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