Crypto Lawyer Says Complete Ripple Victory Unlikely

In Brief

• John Deaton argues that Ripple could win a partial victory against the SEC.
• The SEC will release new internal documents on June 13.
• SEC Chairman Gary Gensler said that cryptos are not incompatible with existing securities laws.
  

Pro crypto lawyer John Deaton says there is only a 3% chance that Ripple will completely win its case against the US Securities and Exchange Commission (SEC).
He added in a recent interview that the XRP issuer has a 25% chance of a favorable verdict, while there is also a 50% chance of a partial victory.

Deaton: Jury Vote is Ripple’s Best-Case Scenario

Deaton said in a recent interview,

“I think that XRP itself is not recognized as a security, and sales in the secondary market confirm my opinion. Even if [the judge] decides that Ripple violated the law, this will not apply to the secondary market.”

The SEC accused Ripple CEO Brad Garlinghouse and co-founder Chris Larsen of selling XRP as an unregistered security in 2020.

According to Deaton, the extent of Ripple’s victory will hinge on whether XRP was sold as an unregistered security at any time.

Ripple’s best-case scenario would be the judge ruling it didn’t have fair notice even if it sold XRP as an unregistered security before it developed the XRP ecosystem.

For a full backgrounder on the Ripple/SEC saga, click here.



In that case, the matter would be presented to a jury and be a “complete win,” Deaton argued.

Pushing Ripple toward that goal could be a statement in an SEC email mentioning that XRP is “probably not” security. He said a June 13 release of internal SEC documents could confirm the statement’s author.

John Deaton defended LBRY content creator Naomi Brockwell from being part of an SEC lawsuit targeting secondary sales of the LBC token.

Ripple Expands Overseas
The SEC-Ripple case caused several exchanges to tank the token’s liquidity through delisting, creating problems for investors.

The agency brought at least 30 enforcement actions against crypto firms in 2022, and refused to draft new regulations.

Chair Gary Gensler told the House of Representatives Committee on Financial Services recently,

“Congress gave the Commission a mandate to protect investors, regardless of the labels or technology used. Nothing about the crypto markets is incompatible with the securities laws.”

BeInCrypto recently confirmed that the SEC considers XRP and 36 other cryptos to be securities.

Garlinghouse said a difficult US market had prompted overseas expansions, including Ripple’s $250 million acquisition of Swiss custodian Metaco. Swiss law treats cryptocurrencies as assets.

The company has also released a central bank digital currency platform offering multiple settlement mechanisms.

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