John Deaton, founder of Digital Asset news firm Crypto Law has expressed confidence in Ripple bagging a win against the US Securities and Exchange Commission (SEC) in the ongoing securities lawsuit.
On April 11, Deaton who is currently representing tens of thousands of XRP holders as amicus curiae, shared his thoughts on the lawsuit, telling of the possible outcomes even as a summary judgement nears.
According to him, it was clear that SEC’s approach to the case was flawed from the beginning, setting the agency up for failure. He highlighted Hinman’s assertions in 2018 that Ether and Bitcoin are not securities, a statement that he said suggested that other tokens, including XRP, were not securities. In his view, XRP’s non-security status was further complimented by Coinbase listing the cryptocurrency with the blessing of the SEC.
Deaton further questioned the SEC’s decision to bring a lawsuit against Ripple, noting that the case would have been settled through enforcement if it was about securities law violations. According to him, it did not make sense for the SEC to allow the defendant to continue selling XRP and violating the law pending the lawsuit’s outcome. He noted that they would have sent a cease-and-desist letter ordering Ripple to stop selling XRP.
However, according to the lawyer, “They (SEC) didn’t because they clearly didn’t conclude in June 13 2018 that today’s XRP was definitely a security.”
Ripple Poised to Win, Says Deaton
Deaton then shared his thoughts on the Lawsuit’s outcome, noting that the SEC was likely to lose to Ripple in one of four possible outcomes.
“In my opinion, the first possible outcome is an outright Ripple win where the judge says there’s no investment contract involved, there’s no post Duty sale obligations,” he said.
According to Deaton, Judge Analisa Torres could also rule that Ripple violated securities laws in the early years for a “specific time” but conclude that XRP doesn’t qualify as securities in today’s secondary sales.
The third outcome is that the SEC wins outright, which according to Deaton, was highly unlikely. “I got that at zero that’s now maybe I shouldn’t have it that low, but that’s how confident I am about that meaning, that ridiculous theory of theirs,” he added.
Additionally, the fourth scenario is if nobody wins, it shall go to the jury for comments and eventual determination.
That said, despite the case being in an advanced stage, the lawyer expressed hope in the possibility of the parties entering a settlement before summary judgement, insisting that the plaintiffs were ready.
“Ripple has agreed that they would settle the case before. Their general counsel and their CEO have publicly stated that they would settle today if the SEC would agree to ongoing future sales secondary market sales,” Deaton said.