Renowned cryptocurrency attorney Jeremy Hogan recently took to the X platform on the details of the ongoing lawsuit between the United States Securities and Exchange Commission (SEC) and Ripple. The case centers on the SEC’s pursuit of “disgorgement” – reclaiming profits obtained through rule-breaking – which has become a contentious issue.
I was in a small argument with my wife last night, which means, I am thinking about "damages" this morning. For me, that is an examination of different restaurants to take her.
— Jeremy Hogan (@attorneyjeremy1) November 5, 2023
For Ripple and the SEC, things are a little more complex.
A small thread if you are interested.
1/ https://t.co/nETbTERVvP
Hogan emphasized the importance of “fair” in calculating disgorgement, citing the SEC v. Liu case of 2020, where it was established that disgorgement should be based on the violator’s net profits after deducting business expenses. Hence, disgorgement is calculated by deducting business expenses from the total net profits of Ripple.
He also highlighted in the ruling that disgorgement should be awarded to victims, individuals or entities who suffered financial losses due to an investment. This nuanced definition raises questions about whether XRP purchasers could be classified as victims, adding complexity to the case.
The SEC’s rare move to sue a company for selling an unregistered security, especially when the “security” increased in value during litigation, has raised fundamental questions about XRP’s nature. Furthermore, the SEC must prove a connection between XRP purchasers and the United States, introducing additional complexities to the jurisdictional aspect of the case.
On the other side, the SEC is relying on established case law, arguing for a ballpark estimate of disgorgement damages and contesting Ripple’s expenses as valid deductions from profits. The headline-grabbing figure of $770 million in disgorgement may undergo significant reduction due to legal arguments and factors under consideration, setting the stage for protracted legal battles expected to continue into 2024.
In the midst of these legal maneuvers, attorney John Deaton’s perspective has injected a sense of optimism into the Ripple community. He asserted that if Ripple ends up paying $20 million or less, it would signify a 99.9% legal victory, a sentiment that aligns with the positive outlook held by many Ripple supporters.
The people who’ve argued that the SEC got a 50-50 victory in the @Ripple case are 💯 wrong. It was more like 90-10 in Ripple’s favor. If Ripple ends up paying $20M or less it’s a 99.9% legal victory. https://t.co/Xe6SYBiTCJ
— John E Deaton (@JohnEDeaton1) November 4, 2023
Attorney John Deaton recently brought to light some serious allegations concerning the SEC’s integrity. He accused them of serving the interests of a particular group of people instead of the public it was designed to protect.
Criticism against the SEC has mounted, with major crypto platforms Coinbase and Binance expressing discontent. Coinbase criticized the SEC’s response to its rulemaking petition as vague and insufficient, while Binance voiced concerns in the context of its ongoing lawsuit.
As the courtroom drama unfolds, the crypto community remains hopeful, buoyed by legal experts’ analyses and the prospect of a favorable resolution for Ripple amidst the complex legal battle against the SEC.
