Attorney John Deaton, Managing Partner of the Deaton Law Firm, has provided insights into the consequences of the civil lawsuit against Ripple Labs. In a recent development, a US district judge certified a class action against Ripple, allowing US-based XRP investors to file a lawsuit accusing Ripple of selling unregistered securities.
This decision has sparked reactions from members of the XRP community, who are anxious about the potential impact of the ongoing SEC vs. Ripple case on the civil lawsuit against Ripple.
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Yesterday, an XRP supporter posed a significant question to Attorney Deaton, seeking clarification on how both lawsuits may intersect and influence each other.
If Ripple Losses, XRP Holders WIll Not Receive Any Money For Years
Deaton clarified that if Ripple loses the lawsuit filed by the SEC, XRP holders may not receive any monetary compensation for a significant period. He emphasized that the possibility of XRP holders being compensated through the civil lawsuit hinges on Ripple’s outcome in its appeal against the SEC.
Attorney Deaton further discussed the potential ramifications of the SEC case outcome if Ripple were to lose. He stated that Ripple would likely appeal the SEC ruling in such a scenario.
According to Deaton, if Ripple chooses to pursue an appeal, the current state of affairs could persist for an extended period, ranging from two to five years. He also speculated that if Congress does not intervene in the matter, Ripple might eventually escalate the case to the Supreme Court. In Deaton’s view, a favorable outcome awaits Ripple at the Supreme Court, resulting in a comprehensive victory over the SEC.
If Ripple Losses, SEC Will Be Resposible For Fund Collection
In a hypothetical scenario where Ripple loses all appeals, including both the SEC and civil case, Attorney Deaton highlighted that it would be the regulatory agency, the SEC, and not the civil plaintiff, who would be responsible for collecting the funds.
Specifically, the SEC would collect the alleged amount of $1.3 billion, which it claims Ripple raised through XRP sales. Once in possession of the funds, the SEC would establish a fund to compensate XRP holders, effectively undermining the civil plaintiff’s position.
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Deaton remarked that if he were the attorney representing the civil plaintiff, he would prefer the SEC to lose because a victory for the SEC would significantly diminish the potential damages in the civil case.
XRP Holders To Enjoy More Compensation
Additionally, Deaton pointed out that if the SEC established a recovery fund, XRP holders would likely benefit more from it than receiving compensation through the civil case. He explained that in the civil case, the lawyers representing the plaintiffs would typically receive a portion of the recovery fund, specifically around 25-35%, as attorney fees.
Furthermore, the attorneys would deduct the expenses incurred during the case from the fund before distributing the remaining amount to XRP holders, as Deaton explained.
