John Deaton, the founder of CryptoLaw and the attorney representing XRP">XRP holders in the ipple-ceo-celebrates-court-victories-over-sec-in-summer-of-justice">Ripple lawsuit, has provided his perspective on the possibility of a settlement before the court issues its summary judgment ruling.
As the anticipation built for the judge’s decision on whether the case would proceed to trial, speculation increased about Ripple and the SEC reaching a settlement agreement prior to the verdict. Deaton offered his viewpoint on the chances of a pre-ruling settlement between the two parties in the high-stakes litigation. With the summary judgment ruling expected soon, the lawyer for XRP holders weighed in on the prospects of Ripple and the SEC settling instead of continuing the case.
Previously, Ripple CEO Brad Garlinghouse said the only way a settlement could happen before the summary judgment ruling was if the SEC determined XRP is not a security.
As anticipation grew for the decision, attorney John Deaton doubted a pre-judgment settlement was likely, which turned out to be correct. Now that the summary judgment has been partially ruled in Ripple’s favor and XRP deemed not a security, Deaton weighs in on if a settlement is still possible at this stage of the legal battle.
With the judge finding XRP non-security, the conditions Ripple’s CEO outlined for a settlement have materialized. However, with both sides claiming some wins in the summary judgment, Deaton provides perspective on whether a settlement could still occur or if the case proceeds further.
John Deaton was replying to an XRP community member’s tweet asking what was stopping a settlement on the unresolved matters in the case.
Ripple’s planned event in New York City on September 29th has also fueled speculation about a potential settlement. Ripple started accepting registrations for what it called a “proper party” to celebrate. CEO Brad Garlinghouse referenced the upcoming gathering in a tweet, saying it would be a chance to share a celebratory toast after the journey of the last few years.
The lawyer’s comments came in response to an XRP holder questioning what was hindering a settlement on outstanding issues after the partial summary judgment win. Meanwhile, Ripple’s advertised New York party has led some to wonder if it could be related to a settlement announcement. However, the company has framed the event as a victory celebration following the long lawsuit journey.
The upcoming Ripple event has sparked speculation that the company could announce a settlement with the SEC or plans to go public through an IPO. However, attorney John Deaton, stating he has no inside information, believes there will be no IPO or settlement news at the party. He thinks the SEC would not approve a Ripple IPO while still seeking a permanent injunction banning future institutional XRP sales and targeting Ripple executives.
Deaton argues the SEC is unlikely to allow Ripple to go public amidst the ongoing legal fight and request to bar Ripple and its leaders from certain XRP transactions. With no insider insight, the lawyer represents his opinion that Ripple’s celebratory event will not involve revelations of a settlement or initial public offering due to the injunction bid and unresolved issues. He contends the SEC would block an IPO under current circumstances as the case continues.
Could Ripple and the SEC come to an agreement outside of court?
Attorney John Deaton thinks the only potential path for Ripple and the SEC to settle before year’s end is if Judge Failla grants oinbase">Coinbase’s motion to dismiss the SEC’s lawsuit, or partially grants it by determining token sales on an exchange through blind bids/asks are not under securities laws but allows the staking issue to proceed.
In Deaton’s view, if the judge rules that way, it could force the SEC and Chair Gary Gensler to change course. He doubts the Solicitor General would permit an appeal in that scenario, given the risk it could reach the Supreme Court and lead to the Court further restricting the SEC’s jurisdiction and federal agency power overall.
The lawyer believes a favorable oinbase">Coinbase dismissal ruling from the judge is the only circumstance where the SEC may agree to settle with Ripple in 2022. A judgment exempting certain exchange transactions from securities laws could prompt the SEC to pivot to avoid an appeal before the Supreme Court, which could limit the SEC’s authority. Absent that outcome, Deaton sees little chance of a near-term settlement.
