- The SEC is seeking $770M in penalties from Ripple beyond just determining if XRP is a security, but Ripple is negotiating to reduce the penalty.
- Ripple may succeed in reducing the penalty by excluding certain transactions and closely examining expenses, similar to the SEC vs LBRY case.
- The outcome of the Coinbase vs SEC case on January 17, 2024 could impact Ripple’s case, either enabling a settlement if Coinbase wins or diminishing hopes if Coinbase loses.
Introduction
The SEC vs Ripple case has taken an unexpected turn, introducing more uncertainty. The SEC now seeks $770M in penalties beyond just determining whether XRP is a security. However, Ripple is negotiating to reduce the penalty, with a chance of success. The Coinbase vs SEC oral argument on January 17, 2024 could also impact Ripple’s case.
Beyond The Courtroom
According to John Deaton, the SEC is “pissed and embarrassed.” It’s now out for $770M worth of “flesh.” This is not just about determining if XRP is a security. The SEC wants to make an example of Ripple. Deaton reveals the penalty phase is like a second case, involving more depositions, interrogatories, document requests, and more.
Negotiations Are On
Ripple is determined to significantly reduce the SEC’s proposed $770M penalty. They aim to exclude certain transactions and closely examine expenses and costs. Deaton compares this to a similar SEC vs LBRY case which saw substantial fine reductions. This suggests Ripple may succeed in reducing the penalty.
Significance of Coinbase vs SEC
Deaton identifies January 17, 2024 as crucial in this legal battle. If Coinbase succeeds, it may force the SEC to rethink its strategy, potentially enabling a Ripple settlement. However, a Coinbase loss could diminish hopes for an agreement.
Deaton points out conflicting federal agency messages on XRP’s status. This ambiguity could work in Ripple’s favor as the case proceeds.
When Will This End?
Deaton doesn’t expect a final judgment before late summer 2023, at the earliest. An appeal could take a full year after that. During this extended process, Ripple may face tens of millions in legal fees.
Conclusion
The SEC vs Ripple case has more uncertainty ahead. While Ripple fights the proposed $770M penalty, the Coinbase SEC case could prove pivotal. We may not see a resolution for quite some time.
