Attorney John Deaton, Managing Partner at Deaton Law Firm, has given his take on the ongoing civil lawsuit against Ripple Labs, implying that should Ripple lose the case, XRP holders could profit more from the SEC’s recovery fund than from the civil case itself.
Ripple Labs, the parent company of the cryptocurrency XRP, has been the target of a class action lawsuit, approved by a US district judge, that accuses the firm of selling unregistered securities. This ruling permits US-based XRP investors to sue Ripple. The progression of this lawsuit has sparked widespread discussion within the XRP community, specifically concerning its possible impacts on the simultaneous SEC versus Ripple case.
Responding to an inquiry from an XRP enthusiast about the dual lawsuits, attorney Deaton outlined the potential consequences for XRP holders if Ripple loses the SEC case. He emphasized that any compensation from the civil lawsuit would only materialize if Ripple also loses an appeal against the SEC ruling.
If Ripple loses to the SEC there won’t be any money collected for years and ONLY if Ripple loses on appeal. If the Supreme Court takes it on appeal (which I believe they will if Congress hasn’t acted by then), I believe Ripple hands down wins with this Supreme Court. If the SEC… https://t.co/0xHw266YXf
— John E Deaton (@JohnEDeaton1) July 6, 2023
Deaton projected that if the blockchain leader loses to the SEC, Ripple would likely appeal the decision, prolonging the uncertainty for the next two to five years. Should Congress fail to intervene, Deaton speculated that Ripple might even escalate the SEC case to the Supreme Court. If this course were followed, he anticipates a complete victory for Ripple.
If Ripple is unsuccessful in all of its appeals, including those in the SEC and civil lawsuits, Deaton clarified that it would be the SEC’s responsibility to collect funds, not the civil plaintiff’s. Deaton explained that the SEC would gather the $1.3 billion they claim Ripple earned from XRP sales and then create a fund to reimburse XRP holders, effectively sidelining the civil plaintiff.
The lawyer predicted that should there be a recovery, XRP holders would gain more from the SEC’s fund than from the civil case. As Deaton explained, the lawyers involved in the civil case would collect between 25-35% of the recovery fund for attorney fees. Once these fees and the case cost are deducted from the fund, the remaining sum would be distributed among XRP holders.
