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Attorney John Deaton, a representative for many XRP token holders in the lengthy legal dispute between Ripple and the U.S. Securities and Exchange Commission (SEC), has provided insights into the possible outcomes.
Deaton provides insight into an important stage of the litigation: Coinbase’s move to dismiss its complaint against the SEC. This motion would have important repercussions if the judge granted it. Token sales on the exchange would become immune from U.S. securities regulations as a result. It’s important to remember that this exception would not apply to cryptocurrency staking activity.
Deaton elaborates, stating, “The only way Ripple and the SEC (could) settle before the end of the year is if Judge Failla grants the Coinbase motion to dismiss or partially grants it – finding token sales on an exchange in a blind bid/ask transaction do not fall under U.S. securities laws.”
The SEC’s ability to pursue an appeal would be limited if the petition to dismiss were granted, making a settlement a practical decision. Deaton emphasizes once more that the SEC would have far less power even if an appeal were still possible.
Ripple argued in a recent filing on September 1 that the summary judgment ignored the legal justification for an interlocutory appeal. The SEC allegedly broke established legal standards when it applied the Howey test to XRP token sales, according to the opposition to the appeal.
The SEC filed a complaint against Ripple, its CEO Brad Garlinghouse, and co-founder Chris Larsen in December 2020. As a result, numerous exchanges decided to delist XRP in order to avoid any potential legal complications. After Judge Analisa Torres’ favourable decision in July, many of these exchanges have indicated their plans to relist the coin.
It’s important to note that the SEC has placed numerous cryptocurrency companies under regulatory scrutiny in 2023, including Binance and Coinbase. On August 29, asset management Grayscale triumphed over the SEC in a recent court case. This win came after Grayscale’s appeal, which resulted in a directive for a thorough examination of its application for a Bitcoin exchange-traded fund.
The crypto industry is carefully following the Ripple vs. SEC case as it develops since the result may have significant ramifications for the legal environment around digital assets.