Lawyer John Deaton, a supporter of Ripple, anticipates a protracted legal battle in the SEC v. Ripple case, possibly extending over a year. Deaton suggested that the possibility of a settlement would only be entertained if Coinbase succeeds in its motion to dismiss the SEC lawsuit.
In a comprehensive post on X (formerly Twitter), Deaton noted the absence of substantial settlement discussions between Ripple, its executives, and the SEC. He highlighted the SEC's intent to impose a $770 million fine and elaborated on the intricacies of the penalty phase, which involves numerous legal proceedings. Deaton remarked, "I don't think there have been any serious conversations about settlement between Ripple, Brad Garlinghouse, Chris Larsen, and the SEC. The SEC is angry and embarrassed and wants $770 million worth of meat."
He detailed the penalty phase as a rigorous process akin to a separate legal case, encompassing depositions, document requests, emails, financial records, contracts, and on-demand liquidity (ODL) transactions. Deaton proposed that Ripple might aim to reduce the $770 million fine by excluding ODL transactions and mitigating additional fees. Drawing on the example of the LBRY case, in which the SEC initially sought $23 million in damages but ultimately settled for a $130,000 fine after eight months of litigation.
Deaton laid out a timeline, anticipating that "Judge Torres will not issue a final ruling until late summer at the earliest. In this case, it could actually take a full year to file an appeal." He linked the outcome of the Ripple case to the SEC's lawsuit against Coinbase, suggesting that if the exchange's motion to dismiss succeeds, the SEC might reconsider its position on cryptocurrencies and contemplate a settlement with Ripple. However, he expressed doubt that a settlement would be reached if Coinbase's motion is unsuccessful. Oral arguments on the Coinbase motion are scheduled for January 17, 2024, with a decision expected within 60-120 days. During this period, Ripple is likely to face substantial legal expenses as it endeavors to reduce its $770 million fine.
