John Deaton says there has not been “a single serious conversation” about a potential settlement between Ripple, Brad Garlinghouse, Chris Larsen and the SEC.
Pro-Ripple lawyer John Deaton said he expects a lengthy legal process in the United States Securities Exchange Commission (SEC) vs. Ripple case — possibly lasting a year. Deaton suggested that a settlement may only be considered if Coinbase’s motion to dismiss the SEC’s case against it is successful.
In a detailed post on X (formerly Twitter), Deaton discussed the lack of serious settlement talks between Ripple, its executives and the SEC. He mentioned the SEC’s desire for a $770 million penalty and explained the complexities of the penalty phase involving various legal processes. He said:
“I do not believe there has been a single serious conversation regarding a settlement between Ripple, Brad Garlinghouse, Chris Larsen and the SEC. The SEC is pissed and embarrassed and wants $770M worth of flesh”
He explained that the penalty phase is a detailed process, akin to a second legal case, involving depositions, document requests, emails, financial records, contracts and on-demand liquidity (ODL) transactions. Deaton suggests that Ripple might aim to reduce the $770 million penalty by excluding ODL transactions and cutting down on additional expenses. He points to the LBRY case, where the SEC initially pursued $23 million but, after eight months of litigation, settled on a $130,000 fine.
As I said on @CryptoLawUS TV yesterday with @attorneyjeremy1 and Thien-Vu, I do not believe there has been a single serious conversation regarding settlement between @Ripple @bgarlinghouse @chrislarsensf and the @SECGov.
— John E Deaton (@JohnEDeaton1) October 25, 2023
The SEC is pissed and embarrassed and wants $770M worth… https://t.co/kcXvsrPgaa
Creating a timeframe, Deaton stated:
“I don’t expect a final judgment, issued by Judge Torres, until late summer, at the earliest. It literally could take a full year before an appeal is filed in this case.“
Deaton connected Ripple’s case outcome with the SEC’s lawsuit against Coinbase, stating that if the exchange succeeds in its motion to dismiss, the SEC may shift its stance on cryptocurrencies and consider a settlement with Ripple. However, if Coinbase’s motion fails, he foresees no settlement.
Related: Coinbase disputes SEC’s crypto authority in final bid to toss regulator’s suit
The oral argument for Coinbase’s motion is scheduled for Jan. 17, 2024, with a decision likely to follow within 60–120 days. Ripple is expected to face considerable legal costs during this period as it attempts to reduce the $770 million penalty.
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