Ripple is unlikely to spend $770M.

Attorney John Deaton representing XRP holders in Ripple vs. The SEC presented a convincing case in the legal saga, which made it impossible for Ripple to disperse the expected $770 million. He made his predictions on various influencing factors that could vitiate the court's judgment.

Deaton emphasizes the importance of the Supreme Court's Morrison decision, which effectively limited the SEC's jurisdiction over sales in the United States. This gains significance as Ripple's XRP sales are under investigation in the United Kingdom, Japan, Switzerland and elsewhere. Additionally, XRP's legal status in these regions strengthens Ripple's position.

I'll address this on Tuesday's @CryptoLawUS live stream. @Ripple will pay much less than $770M.

The Supreme Court said liquidation is not punitive in nature and cannot exceed the “net profit” of the sale. A company can reduce legal business expenses. @bgarlinghouse and… https://t.co/jDkOfouj1w

— John E Deaton (@JohnEDeaton1) November 11, 2023

For example, regulatory bodies such as the Financial Conduct Authority (FCA) in the UK and the Financial Services Agency (FSA) in Japan have not classified XRP as a security. This classification is critical as it allows XRP sales to continue legally in these jurisdictions, challenging the SEC's efforts to crack down on these international transactions.

In addition, Deaton emphasized that the legal action against Ripple is not focused on fraud, but on creating a regulatory dispute. This distinction is important because it shifts the focus from punitive measures to regulatory compliance. Since most XRP sales occur outside of the US and involve accredited investors, the risk of fragmentation is greatly reduced. With more than 90% of its total sales and excluding non-U.S. sales to accredited investors, Deaton estimates that it will significantly reduce the amount it can liquidate.

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In addition, the lawyer said that most of the institutional sales of XRP did not cause damage, because the current price of XRP exceeds the levels in those sales, which shows that there is no loss of investors. Deaton highlights that the rapid nature of liquid demand (ODL) with XRP occurs in a matter of seconds, which minimizes the risk to investors. What is interesting is that the allegations of damage are more against the SEC than Ripple, especially among the 75,000 XRP owners who are involved in the legal action.

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