Ripple and the SEC: Potential Settlement Steps
In light of the ongoing discussions regarding a potential settlement between Ripple and the United States Securities and Exchange Commission (SEC), John Deaton, a lawyer representing numerous XRP token holders, has outlined the possible steps the two parties might take if they opt for a resolution.
Explaining the factors that could affect a settlement between the two entities, Deaton highlighted the importance of the Coinbase vs. SEC lawsuit. He mentioned that if the judge presiding over the case grants Coinbase’s motion to dismiss, it would suggest that token sales on the exchange are not subject to U.S. securities laws, albeit the crypto staking aspect of the trial remains unresolved.
He wrote in a post,
If the motion to dismiss is approved, the SEC’s ability to appeal would be limited, making a settlement the more feasible option. Deaton also clarified that even if an appeal was possible, the agency’s authority would be significantly reduced.
Web 3.0 vs Metaverse
On September 1, 2023, Ripple filed documents indicating that the Summary Judgment had not taken into account the legal basis for the interlocutory appeal. This was based on the argument that the agency had diverged from the established legal outlook, particularly with respect to the application of the Howey Test to XRP token sales.
In December 2020, the SEC initiated a lawsuit against Ripple, CEO Brad Garlinghouse and co-founder Chris Larsen, prompting several exchanges to remove XRP to avoid potential legal issues. However, following the Torres ruling, many of these exchanges expressed their intention to relist the token or explore such possibilities in the future.
In 2023, the SEC has taken legal action against various cryptocurrency firms for alleged securities violations, including Binance and Coinbase. On August 29, asset manager Grayscale won a legal victory against the SEC through an appeal that required a review of its application for a Bitcoin exchange-traded fund (ETF).
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