In the ongoing legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC), John Deaton, an attorney representing XRP holders, has made a case for Ripple's likely minimal disgorgement. His comments, shared on @CryptoLawUS, suggest that Ripple may only need to pay $20 million or less, a stark contrast to the speculated $770 million.
Deaton's argument hinges on the Supreme Court's Morrison ruling, which limits the U.S. jurisdiction over non-U.S. sales. He highlighted that XRP is not considered a security in several countries, including the U.K., Japan, and Switzerland, where it is classified as an exchange or utility token by regulators like the FCA and FSA. This international classification could significantly impact the SEC's attempt to seek disgorgement for sales outside of its jurisdiction.
Furthermore, Deaton pointed out that the Ripple lawsuit is not framed as a fraud case; instead, it focuses on whether investors were harmed by Ripple's actions. He noted that most institutional sales of XRP were to accredited investors at prices lower than its current market value, implying that there was no harm done to these investors. Additionally, he mentioned On-Demand Liquidity (ODL) transactions, stating that they do not cause harm due to their swift nature.
Deaton also revealed that 75,000 XRP holders have joined the lawsuit against the SEC, accusing the regulatory body of causing harm rather than Ripple itself. With this support and the legal arguments presented, Deaton expressed a confident prediction of a 99.9% win scenario for Ripple in this high-stakes legal confrontation.
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