The US Securities and Exchange Commission (SEC) has dropped its appeal against Ripple, a move that crypto lawyer John Deaton believes is the "final exclamation point that these [XRP] tokens are considered digital commodities, not securities." Deaton made his comments to Cointelegraph in an interview, highlighting the significance of this development for the cryptocurrency industry.
Deaton’s assertion is rooted in his understanding of the case and its implications. As a lawyer who has represented XRP holders and argued that their interests were not being represented by the SEC in the lawsuit against Ripple, Deaton brings a unique perspective to this topic. He has also been involved in other high-profile cases related to cryptocurrency regulation, including running for a Senate seat in Massachusetts.
Despite the dropping of the SEC’s appeal, there is still a $125-million judgment against Ripple that arose from the improper selling of XRP. According to Deaton, Ripple may now be able to negotiate down this judgment due to the new circumstances. This development has significant implications for Ripple and its investors, who have been impacted by the ongoing lawsuit.
One factor that will continue to play a major role in the fate of Ripple’s appeal is the company’s decision to file a cross-appeal in October 2024. Deaton believes that the SEC does not want Ripple to proceed with this appeal because it could potentially undermine the commission’s jurisdiction and affect other cases related to cryptocurrency regulation.
This raises an intriguing question: what impact will the dropping of the SEC’s appeal have on the company’s negotiations regarding the settlement? Will it be enough to convince the court to reconsider its previous ruling, or will it ultimately lead to a more favorable outcome for Ripple?
As Deaton pointed out in his interview with Cointelegraph, "Everything’s turned. The election’s turned, the industry turned, the SEC [has] completely done a 180 as it relates to the industry." This stark change in circumstances has given Ripple some leverage in negotiating its settlement.
Despite this development, there is still an injunction issued by Judge Analisa Torres that prevents Ripple from selling XRP to institutional investors. According to Deaton, "If Ripple obviously wants to be able to issue XRP to banks in America directly, I think the hang-up is that injunction." This raises difficult questions about how Ripple can overcome this hurdle and achieve its business objectives.
It’s worth noting that Deaton’s comments on this topic are informed by his broader understanding of the industry and its development. He believes that the SEC’s move to drop its appeal against Ripple is part of a larger shift in the agency’s stance towards cryptocurrency regulation. As he noted, "I remember when this case was first filed. I thought it was an assault on the industry, like the boot on the neck of the industry."
Deaton’s perspective on this matter is rooted in his experience as a lawyer who has represented XRP holders and his involvement in other high-profile cases related to cryptocurrency regulation.
According to Deaton, Ripple can appeal to the fact that it never left the US despite the SEC bringing the case against it. This argument is based on the company’s status as an American-made business. As Deaton pointed out, "I think it’s to do with Brad Garlinghouse being able to say, ‘Well, look, we got sued by the US government and the Biden administration; we’re an American-made company, you know, [and] we never left.’ And I think that bodes well."
Conclusion
The dropping of the SEC’s appeal against Ripple is a significant development for the cryptocurrency industry. It highlights the ongoing negotiations between the parties involved in the lawsuit and suggests that there may be new opportunities for Ripple to achieve its business objectives.
As Deaton’s comments demonstrate, the outcome of this case will have far-reaching implications for the regulation of digital commodities and the status of XRP as a security or commodity. This is an important topic that requires careful consideration and analysis.
It remains to be seen how Ripple will negotiate down the $125-million judgment against it and what impact this development will have on the company’s future prospects. However, one thing is clear: the dropping of the SEC’s appeal marks a major turning point in the case and paves the way for renewed debate about the role of XRP in the US and its classification as a security or commodity.
In conclusion, the decision by the SEC to drop its appeal against Ripple has significant implications for the cryptocurrency industry. As a development that signals a new era in regulating digital commodities, it highlights the need for ongoing analysis and discussion on this topic.