Ripple recently won its third lawsuit against the US Securities and Exchange Commission (SEC). However, pro-XRP attorney John Deaton points out that the SEC’s decision to dismiss the case was a strategic move aimed at speeding up appeals.
Deaton believes the SEC dropped the charges because it doubted the win over Ripple’s CRO, Brad Garlinghouse, and CEO Chris Larsen. But despite the move, the SEC cannot appeal immediately because the case enters the penalty phase first. At this stage, fines and penalties determined by the court are imposed and enforced.
Negotiations are now expected to begin on how much Ripple should pay due to potential illegal XRP sales. Deaton expects the amount could be reduced significantly through negotiations. Previous hearings in July revealed that the sale of XRP through exchanges is not covered by federal securities law. However, Ripple violated this law when selling tokens directly to institutional investors.
Deaton expects long negotiations
Deaton expects negotiations to exceed $770 million. It is estimated that the case could take eight months or more to conclude. This means an SEC appeal before 2023 is unlikely. The two sides agreed to meet no later than November 9.
The SEC is under fire
Other experts also expressed their dissatisfaction with the SEC’s actions. Bill Morgan accuses the SEC of deliberately prolonging the lawsuit in order to increase Ripple’s legal costs. He hopes the SEC will face major challenges in the penalty phase.
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