The long-standing conflict between Ripple and the U.S. Securities and Exchange Commission (SEC) is back in the spotlight. Pro-XRP lawyer John Deaton has explained the current situation.
What is this Settlement About?
The SEC and Ripple have reached a proposed settlement where:
- The SEC wants to lower Ripple’s penalty from $125 million to $50 million.
- The agency also seeks to remove a legal injunction preventing Ripple from violating securities laws.
If the judge agrees to this, the case would finally be settled.
Judge Torres' Response
Many believed that Judge Analisa Torres would quickly approve the deal, but she surprised both sides. According to Deaton, the judge stated:
- They cited the wrong legal rule.
- They have not shown 'exceptional circumstances', a very strong legal reason for undoing her previous decision.
Deaton explained that a judge cannot simply reverse an order without serious justification, especially after 4.5 years of work and resources invested in this case.
Is a Deal Still Possible and Why It Matters?
Deaton believes there is a reasonable chance the judge will eventually approve the settlement, estimating about a 70% likelihood, but she is demanding better explanations first. Both sides must demonstrate how this deal serves both private interests (Ripple and SEC) and public interest (protecting other crypto investors and companies).
They also need to convince her that settling now would save time, money, and resources for the courts and avoid risky appeals for both parties.
This case is one of the most significant for cryptocurrency regulation in the U.S. If the injunction is lifted and the fine reduced, Ripple avoids a larger penalty, the SEC mitigates the risk of losing an appeal, and the case concludes without altering Judge Torres' previous ruling that XRP itself is not a security in the U.S.
