In the event that the U.S. Securities and Exchange Commission (SEC) prevails against Ripple Labs and XRP is deemed to be a security, a lawyer has described what he thinks is most likely to happen. If the SEC prevails, he anticipates Ripple would file an appeal but cautions that “if Ripple loses to the SEC, there won’t be any money collected for years.”
The creator of Crypto Law and managing partner of the Deaton Law Firm, attorney John E. Deaton, has explained what he thinks might transpire if Ripple Labs loses the SEC’s legal battle against it and XRP is deemed a security.
In December 2020, the SEC filed a lawsuit against Ripple, its co-founder Chris Larsen, CEO Brad Garlinghouse, and the $1.3 billion sale of XRP tokens, which the regulator alleged to be unregistered securities. Analisa Torres, a U.S. District Judge, is presiding over the proceeding. Insisting that XRP is not a security, the Ripple team.
Deaton tweeted on Thursday, “If Ripple loses to the SEC, there won’t be any money collected for years.” He explained:
“If the SEC wins, Ripple will appeal, and the current situation will persist for the next two to five years.”
“Ripple will appeal that case as well, and there will be no money for years, if ever,” he cautioned, highlighting: “Assuming the SEC wins, and the civil case lawyers get a win because the judge in California follows Judge Torres’ ruling,” he added:
If Ripple loses all of its appeals in five years, the SEC, not the civil litigants, would then be in possession of the money ($1.3B).
The pro-XRP lawyer noted in this case that the securities regulator “would then offer a payback — a fund for XRP holders to sell their XRP (this is what happened in Veritaseum).”
“If I were the Plaintiff’s lawyer in the civil case, I would want the SEC to lose because the SEC winning will gut the damages for the civil case,” Deaton stated. Ironically, XRP holders would receive more money from the SEC fund if there was a recovery since in the civil case, the attorneys will receive between 25 and 35 percent of the recovery for attorney fees before the costs of the litigation are subtracted from the fund.
In addition, he added, “If the Supreme Court takes it on appeal (which I believe they will if Congress hasn’t acted by then), I believe Ripple hands down wins with this Supreme Court.”
The lawyer continued by outlining the consequences of being included on his list of 75K XRP owners. Being on the 75K list is beneficial since it makes a large putative class of XRP holders immediately identifiable. He said that no one waived any rights by signing up for the class list he released.
Because you have to notify XRP holders of the recovery, and I have a list of 75K, he asserted, “I’d likely be called if there was ever money for XRP holders, from the civil action or the SEC case.
Deaton stated, “The reality is I doubt the civil case leads to anything,” adding that, strangely, if the SEC prevails, it will ironically receive the greatest compensation and provide the best alternative. Additionally, if Congress fixes this regulatory issue during the five years of appeals and Ripple loses, everything disappears nevertheless.
The $200 million in expenditures incurred by Ripple as a result of the legal dispute with the SEC were reported by the company’s CEO in May. He previously stated that the outcome of the SEC action against Ripple will be “pivotal for the whole industry.”
Via: 2Usethebitcoin.com
