Crypto Lawyers Predict Prolonged Fight in Ripple-SEC Case
Ripple Labs and the Securities and Exchange Commission (SEC) are engaged in a long-running legal battle.
Lawyer Bill Morgan, known for his insights, predicts an intense legal battle between Ripple and the SEC.
The SEC initially sought over $1 billion in penalties from Ripple, which was later revised down to $770 million.
The long-running legal case between Ripple Labs and the U.S. Securities and Exchange Commission is expected to ramp up, not wind down, according to analysis by crypto lawyers.
In a series of tweets, lawyer Bill Morgan, known for his keen insights into the case, reviewed the remedies phase roadmap laid out in recent court filings. He predicts a “full-on” battle between the parties.
It will heat up not settle. The remedies phase in the #SEC v Ripple matter will be full on. I was refreshing my memory from the letters the parties sent to the court about the SEC’s intention to pursue the ultimately doomed motion for permission to file an interlocutory appeal./1 — bill morgan (@Belisarius2020) October 25, 2023
“How do you get a settlement out of all that? I don’t think so at this time,” Morgan stated.
The SEC initially sought over $1 billion in penalties from Ripple before revising it down to $770 million. Ripple aims to substantially reduce that amount by excluding certain XRP sales to commercial customers.
Ripple, in its letter to the court, provided insight into the specific areas of contention that are set to dominate the proceedings. One of the pivotal issues revolves around distinguishing institutional sales from non-institutional ones, according to Morgan.
This matter is particularly contentious due to the significant amounts involved, especially concerning post-complaint sales to On-Demand Liquidity (ODL) customers for cross-border payments. These sales, as Morgan pointed out, don’t seem to fit the definition of investment contracts, given that ODL customers are not investing in XRP for profit.
Additionally, Morgan also highlighted that unresolved questions linger over the SEC’s jurisdiction in transactions involving institutional sales, where many transactions did not have any connection to the United States.
Lawyer John Deaton, who has closely followed the case, agreed with Morgan’s assessment. In a reply tweet, Deaton said he does not believe any serious settlement talks have occurred.
As I said on @CryptoLawUS TV yesterday with @attorneyjeremy1 and Thien-Vu, I do not believe there has been a single serious conversation regarding settlement between @Ripple @bgarlinghouse @chrislarsensf and the @SECGov.
The SEC is pissed and embarrassed and wants $770M worth… https://t.co/kcXvsrPgaa — John E Deaton (@JohnEDeaton1) October 25, 2023
He emphasized Ripple’s desire to drastically reduce the $770 million penalty by excluding ODL transactions and making cuts in various expenses.
Drawing parallels to another case involving LBRY, Deaton highlighted the arduous and time-consuming nature of these legal proceedings. It took eight months of additional litigation before a fine of $130,000 was ultimately imposed.
The remedies phase will involve significant additional discovery and litigation, which could drag on for months. Deaton predicts a final judgment no sooner than late summer 2023, with appeals likely pushing well into 2024.