Attorney John Deaton, the founder of Crypto Law, issues fresh comments regarding a potential settlement in the ongoing lawsuit between the SEC and Ripple.
In a recent interview on Thinking Crypto, Attorney Deaton speculated that there will be no settlement in the Ripple case due to the SEC’s securities claim against other crypto projects.
Is a settlement between #Ripple and the #SEC still on the table? How does Elizabeth Warren’s attack on #Crypto impact settlement talks.
Attorney John Deaton shares his thoughts!
WATCH the full interview https://t.co/yJnlrBrJq8#xrp #bitcoin #altcoins #garygensler… pic.twitter.com/nmajjwpi0W
— Tony Edward (Thinking Crypto Podcast) (@ThinkingCrypto1) December 21, 2023
SEC Claim Against Cardano Could Hinder Ripple Settlement
Notably, Deaton said he does not think the SEC will settle with Ripple and agree that XRP sold on exchanges are not securities while the commission still considers ADA, SOL, and MATIC to be investment contracts.
“Is the SEC going to say, ‘well, let’s come to grips and agree that XRP sold on exchanges is not a security but Cardano is, I don’t see it [happening],” said Attorney Deaton.
Recall that in June, the SEC labeled ADA, SOL, MATIC, and over ten cryptos as securities in its lawsuits against Coinbase.
The SEC alleged that Coinbase violated U.S. laws by operating an unregistered securities exchange and facilitating the trading of assets deemed as investment contracts.
A month later, a federal court in New York issued the highly-anticipated summary judgment in the Ripple case, where it held that XRP in itself is not a security. The court also found that Ripple’s programmatic sales and other distributions are not investment contracts, as alleged by the SEC.
While some legal experts speculate that the SEC could appeal the decision after the final judgment, others predict that the regulator could settle with Ripple.
Possible Factor For a Settlement
Attorney Deaton is among the legal experts who do not think a settlement is the next outcome in the lawsuit. Deaton, who believes the SEC is currently in a war against crypto, argued that the commission will only settle with Ripple based on the outcome of its legal tussle with Coinbase.
According to Deaton, there could be a settlement in the Ripple case if Coinbase wins its motion to dismiss the SEC charges.
“The only thing I see causing the settlement is if Coinbase wins their motion to dismiss or partially wins it. That’s the only thing. Otherwise, it’s still a war. We’re in the middle of a war,” said Attorney Deaton.
If the San Francisco-based exchange wins the litigation, the court will dismiss the SEC’s claim that ADA and a host of other crypto assets are securities.
This way, it would be easier for the SEC to settle with Ripple and agree that XRP coins traded on exchanges are not securities, according to Deaton’s statement.
For context, in October, Coinbase filed its final motion to dismiss the charges filed by the SEC, arguing that crypto assets traded on its platform do not constitute investment contracts.
Additionally, the exchange also argued that the SEC does not have Congress’ blessing to regulate an industry like crypto. The court has yet to issue its decision on the matter. Some legal experts, including Deaton, speculate that the Coinbase ruling might be issued by early next year.
In the meantime, the Ripple case is still in the remedies stage, with the proceeding scheduled to commence in February. After the court releases the final judgment, the SEC will decide whether it will settle with Ripple or challenge the summary judgment decision in the Second Circuit.
