In a legal twist that has sent shockwaves through the cryptocurrency world, Attorney John Deaton, a prominent figure in the crypto-law arena, has made a surprising revelation regarding institutional investors’ acquisition of XRP, Ripple’s digital asset. As the ongoing lawsuit between the U.S. Securities and Exchange Commission (SEC) and Ripple approaches the crucial remedies phase, Deaton’s insights are turning heads.

Deaton’s statement is nothing short of astonishing, suggesting that institutional investors might not have acquired XRP above $0.60. This revelation raises important questions about the future of XRP, especially for those who have invested in this cryptocurrency.

It’s essential to clarify that Deaton’s remarks exclude XRP purchases made by Ripple’s On-Demand Liquidity (ODL) clients. Ripple’s ODL solution serves as a bridge between different fiat currencies during cross-border settlements, requiring users to acquire XRP for facilitating these payments.

The background of this legal drama lies in the SEC’s lawsuit against Ripple, alleging that the company violated federal securities laws in its institutional sales of XRP. Attorney Jeremy Hogan, another legal expert following this case closely, suggests that the recent Second Circuit ruling in the SEC v. Govil case could have an impact on the remedies phase of the Ripple lawsuit.

In the Govil case, initiated in 2021, the SEC charged the defendant with involvement in a fraudulent securities scheme through a company named Cemtrex. While Govil accepted returning the proceeds obtained from the scheme, the SEC demanded additional disgorgement.

A federal court granted the SEC’s request for additional disgorgement, prompting the defendant to seek an appellate review. Interestingly, the U.S. Court of Appeals for the Second Circuit overturned the lower court’s decision and remanded the case. This time, the Second Circuit instructed the federal court to grant disgorgement only if Cemtrex investors suffered financial losses.

Hogan suggests that, based on this Second Circuit decision, XRP holders may need to demonstrate losses for Ripple to be held liable during the penalty phase of the SEC lawsuit. However, a keen XRP enthusiast pointed out that the SEC’s damages sought would likely apply only to institutional investors who incurred losses. This conclusion arises from Judge Analisa Torres’s ruling on July 13, which found that Ripple violated the law through its past sales of XRP to institutional clients.

In line with this interpretation, Attorney Morgan also concurred, emphasizing that Ripple’s liability might extend solely to institutional investors who acquired XRP above $0.60.

Now, as the legal battle unfolds, XRP investors find themselves navigating these complex legal waters. The digital asset itself has experienced a remarkable surge, trading at a price above $0.60, marking a significant 9.3% increase in the past day, according to data from CoinGecko.

What remains to be seen is how the Second Circuit’s decision in the SEC v. Govil case will influence the upcoming remedies phase of the SEC v. Ripple lawsuit. If this legal precedent is adopted, Ripple’s potential fines might only apply to institutional investors who purchased XRP above $0.60.

The remedies stage of the SEC v. Ripple lawsuit is set to commence soon, with the court already instructing the involved parties to propose a joint briefing schedule for this crucial phase no later than November 9. To date, both parties have yet to comply with this order, leaving the crypto world on edge, eagerly awaiting the outcome of this high-stakes legal showdown.

In conclusion, the cryptocurrency community, particularly XRP investors, is closely watching as the SEC lawsuit against Ripple takes new turns. Attorney John Deaton’s revelation about institutional investors’ XRP acquisition, combined with the influence of the Second Circuit’s ruling, is sure to shape the course of this legal battle. As the remedies phase looms on the horizon, the future of XRP remains uncertain, and the crypto world.