A Considerably Reduced Fine for Ripple
- The SEC fine imposed on Ripple is likely to be reduced.
- The case is based on a regulatory disagreement, not fraud, potentially influencing the amount of the fine.
- Significant sales of XRP outside the United States could greatly minimize the fine.
In the midst of its legal battle with the SEC, Ripple, the company behind the cryptocurrency XRP, is facing a potential fine of up to $770 million. However, John Deaton, a lawyer representing XRP holders, believes that this sum could be considerably reduced.
Deaton’s Arguments
Deaton emphasizes that the case against Ripple is not based on an accusation of fraud, but rather a “regulatory disagreement.” He also highlights the Supreme Court’s decision in the “Morrison” case, a ruling that limits the SEC’s jurisdiction to sales made in the United States.
This ruling is crucial as a large portion of Ripple’s XRP sales have taken place in regions where XRP is not considered a financial security, such as the United Kingdom and Japan. As a result, this legal status allows for the continuation of XRP sales in these regions, presenting a challenge to the SEC’s efforts to recover these international transactions.
90% of XRP Sales Not Subject to Restitution?
Taking these factors into account, Deaton estimates that the majority of XRP sales made outside the United States, which could represent over 90% of the total, will not be subject to restitution.
Furthermore, most institutional sales of XRP have occurred at prices higher than current levels, suggesting no losses for investors.
As a result, the likelihood of a $770 million fine seems unlikely, and Ripple may only have to pay a fraction of that amount.
