XRP Lawyer Predicts Reduced $770 Million Fine for Ripple
XRP holders’ attorney, John Deaton, reaffirms his belief that Ripple, the fintech company, may not have to pay the speculated $770 million in disgorgement.
The U.S. Securities and Exchange Commission (SEC) is seeking disgorgement for XRP sales in various countries, including the United Kingdom, Japan, and Switzerland.
Deaton argues that Ripple will not come close to paying the $770 million, citing the Supreme Court’s Morrison ruling, which excludes such sales. Additionally, XRP is considered a non-security in these nations and other jurisdictions.
The Financial Conduct Authority (FCA) in the UK and the Financial Services Agency (FSA) in Japan have both classified XRP as an exchange or utility token, rather than a security token.
Since selling XRP remains legal in these jurisdictions, the SEC faces challenges in seeking disgorgement from these sales. Deaton believes it is unlikely to happen since the Ripple lawsuit is not a fraud case and the court’s goal is not to punish Ripple.
The probability of a $770 million fine is low because non-U.S. sales, which could account for over 90% of the sales, will be deducted. Additionally, sales to accredited investors will also be deducted, leaving the SEC with the option to tie the disgorgement to harmed investors.
Deaton highlights that many previous institutional sales involved XRP at a lower price than it currently is, meaning there is no harm in those instances. Furthermore, harm is non-existent in the case of On-Demand Liquidity (ODL) transactions due to their rapid transaction period.
For the 75,000 XRP holders who joined the lawsuit, accusations of harm are directed at the SEC rather than Ripple.
Deaton suggests a 99.9% win scenario for Ripple, where the company would only need to pay $20 million or less as disgorgement.