John Deaton, a pro-XRP lawyer, made some recently explanations regarding the ongoing legal battle between Ripple and the US Securities and Exchange Commission (SEC). Deaton believes that if Ripple loses to the SEC, no money can be collected for years, and only if Ripple loses on appeal.
However, he also believes that if the Supreme Court hears the appeal, which he thinks they will if Congress has not acted by then, Ripple will win hands down.
Legal problems at Ripple can drag on for years
Deaton believes that if the SEC wins, Ripple will appeal and the current status quo will continue for the next 2-5 years. Deaton emphasized:
Assuming the SEC wins and the civil case attorneys get a win because the California court follows Judge Torres’ ruling, Ripple will also appeal that case, and there will be no money for years, if ever.
In such a scenario, if Ripple loses all appeals, the SEC would collect the money, not the civil plaintiffs. The SEC would then offer a redemption fund for XRP holders to sell their XRP, as in Veritaseum.
The Veritaseum and ongoing Ripple cases are similar in that they both involve allegations of unregistered securities offerings in the cryptocurrency industry.
In the Veritaseum case, the SEC alleged that Veritaseum and its founder, Reginald Middleton, conducted an unregistered initial coin offering (ICO) that raised approximately $14.8 million. Similarly, in the Ripple case, the SEC alleged that Ripple made an unregistered securities offering by selling XRP to investors.
After the Veritaseum case was concluded, the SEC established a Fair Fund to distribute the funds collected from the defendants to investors harmed by the unregistered offering of securities. The Fair Fund enabled investors participating in the Veritaseum ICO to request a refund of their investment.
This development could serve as a precedent for how the SEC can move forward with the Ripple case if it successfully proves that XRP is a security. In such a scenario, the SEC can similarly establish a Fair Fund to compensate investors who bought XRP during the unregistered securities offering.
XRP holders can continue to believe that their assets are not securities
In addition, Deaton argued that being on the “75K List” – a list of more than 75,000 XRP holders who are named as potential “intermediaries” – is a good thing because a huge alleged class of XRP holders easy to identify.
By joining the class list he put out no one waived anything, and if there were ever money for XRP holders from the civil case or the SEC case, he would probably be contacted because he has the list of “75K”.
The purpose of the list is to enable these XRP holders to seek reimbursement or other assistance if the SEC case against Ripple results in a judgment or settlement affecting the value of XRP. By joining the list, these individuals indicate that they believe that XRP is not a security and that they should be allowed to participate in all proceedings related to the matter.
Furthermore, Deaton advises ignoring the people who claim that joining the 75K list and arguing that XRP is not a security is a bad thing if there is a monetary recovery one day for XRP holders.
All in all, Deaton believes the civil case may go nowhere. If the SEC wins, it would collect the most money and offer the best option, “ironically.”
And if Ripple loses and Congress resolves this regulatory mess during the 5 years of appeals, it will all “go away anyway,” according to the pro-XRP lawyer.
Featured image of Unsplash, chart from TradingView.com
