- John Deaton offers insights into the SEC’s push for financial disclosures.
- Ripple’s defense hinges on demonstrating exemptions to institutional sales.
- Deaton suggests no immediate prospects of settlement, signaling continued litigation ahead.
In a recent live podcast, John Deaton, a prominent lawyer advocating for XRP holders, provided insights into the ongoing SEC vs. Ripple lawsuit as it advances into the remedy stage. He clarified the recent legal filings that have surfaced from both sides in recent days pending the remedies hearing.
According to Deaton, the crux of the matter lies in the SEC’s motion to compel Ripple to disclose financial statements from 2022 to 2023. This is coming after the regulator’s initial complaint filed in December 2020.
Deaton emphasized that the SEC’s primary objective is to scrutinize Ripple’s financial records to ascertain the legality of XRP sales since the complaint was lodged. The regulatory body seeks to classify these sales as illegal securities transactions, potentially subjecting Ripple to significant penalties under Section 5 of the Securities Act of 1934.
However, Ripple’s defense hinges on demonstrating exemptions to institutional sales, which the court had earlier ruled violated securities laws. Deaton suggested that Ripple might avoid substantial fines if it can prove exemptions for a significant portion of institutional transactions.
Furthermore, the attorney highlighted Ripple’s response, which denounces the SEC’s attempt to expand allegations beyond the scope of the initial complaint. Ripple has described the regulator’s attempt as an inappropriate extension of litigation. Moreover, Ripple contends that the discovery stage has concluded, and prolonged scrutiny of additional transactions would be unjustified.
Amid these intense legal filings and counter filings, Deaton dismissed any immediate prospects of settlement. While acknowledging the potential for future settlement discussions, he underscored the current absence of such negotiations. He speculated that the SEC might entertain settlement talks if they perceive potential gains surpassing those achievable through legal rulings.
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