Attorney John Deaton Disses Disgorgement: Strikes Blow to SEC in Ripple Case

The case centres on regulatory disagreement, and not on fraud as most of those XRP sales happened outside the U.S and involving accredited investors, the scope for disgorgement narrows.
Legal Expert John Deaton Questions Lightning Network Security Amid Growing Doubts

XRP lawyer, Attorney John Deaton, made waves this week with his latest legal arguments in the ongoing Ripple vs. SEC lawsuit. pointing out factors that challenge the SEC’s demand for $770 million and could potentially influence the court’s decision in favor of Ripple.

Central to Deaton’s stance is the Supreme Court’s Morrison ruling, which restricted the SEC’s authority to only transactions within U.S. borders. With a substantial portion of Ripple’s XRP sales taking place in the UK, In Japan, Switzerland, and other regions where XRP is not classified as a security, the SEC faces jurisdictional limitations in pursuing disgorgement as regulators in these nations have permitted XRP sales.

Moreover, Deaton notes that the case centers on regulatory disagreement and not allegations of fraud. With many XRP sales happening outside the U.S. and involving accredited investors, the scope for disgorgement narrows.

Additionally, Deaton mentions that most institutional XRP sales have largely avoided harming investors, as the current XRP price is higher than during those transactions. He also highlights the quick nature of XRP transactions, happening within seconds, minimizing the potential for investor harm.

The attorney notes that the accusations of harm are more directed at the SEC than Ripple, especially among the 75,000 XRP holders involved in the legal action. 

Also Read: Ripple Partner With Onafriq For Africa Cross-Border Payments

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