Perhaps the most important question for the XRP community today is how the lawsuit between Ripple Labs and the US Securities and Exchange Commission will end. In addition to the decision for Ripple, the public is also hoping for a settlement that could impose penalties on Ripple but classify all current sales of XRP as non-security.
Attorney John E. Deaton, who represents 75,000 XRP investors in a lawsuit with an amicus brief, recently made poll on Twitter about what results the public expects in 2023. Out of 18,000 votes, 59% of people said that they expect a settlement between Ripple and the SEC.
Surprisingly, Deaton has changed his mind and is among the 39% who expect a verdict from Judge Analisa Torres. As the lawyer explained, he originally believed that the damaging Hinman document was “very valuable” to Ripple and “very damaging” to the SEC.
Hinman Docs No Chip Bargaining For Ripple?
The latest overview of Ripple punishment The letter paints a different picture. The Ripple letter lists 4 pages of emails, with only two word redactions.
Before reading the last two Ripple Briefs, I was convinced that XRP was being referenced in the email. Since ETH got a regulatory free pass, I’m sure someone in the Hinman greeting email chain might be asking, “What is XRP?
Deaton no longer holds that view. They don’t believe XRP has been mentioned in emails, comments, or drafts anymore. If XRP itself had been mentioned in the email, Ripple’s lawyers would have been mentioned in the brief, Deaton said.
According to the lawyer, it may simply be a statement that simply having an amount of assets or tokens is not enough to satisfy the public company factor in Howey, despite the SEC’s claims to the contrary.
Given that the emails and comments may not be as dangerous to the SEC as they believe, and thus defeat the entire crypto regulatory strategy, Deaton believes that a settlement would not be the most likely outcome.
IMO, the only other reason for Gensler to settle is to avoid setting a bad precedent for the SEC by going against other tokens. But, tbh, I just don’t think he’s worried about that. […]
I do not believe that they will establish and publicly agree that the ongoing and future sales of XRP, including in the secondary market, are non-securities.
Settlement is still possible
However, another XRP community advocate, Bill Morgan, partially disagreed with Deaton. According to Australia, it is likely that the SEC will decide the sealing issue in favor on procedural grounds, so that Ripple will not be able to use the Hinman document as a bargaining chip for settlement.
However, Morgan does not believe this means there will be no settlement or no possibility. According to lawyers, there are many bets for the SEC that the inapplicability of the Howey test to XRP will be determined.
There is a lot for the SEC to lose if Ripple’s arguments on blue sky & public company issues are accepted by Judge Torres. The stakes for both parties are high and this consideration or the risk of losing should only be more severe for both parties with the SJ movement being fully briefed.
A defeat against Ripple would also undermine the SEC’s plans to expand its reach into the secondary market of crypto trading. That’s why Morgan believes there is still a good chance for a settlement.
As Bitcoinist reported, January 18 is the last important date before Judge Torres makes his ruling, unless a settlement agreement is announced anytime soon.
At press time, XRP was trading at $0.3444 after starting the Asian trading session down 12% and looking to bounce back quickly.
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