Crypto Law founder John Deaton has weighed in on a potential consequence if Ripple loses its case against the SEC. As the legal battle between the Sec
Crypto Law founder John Deaton has weighed in on a potential consequence if Ripple loses its case against the SEC. As the legal battle between the Securities and Exchange Commission and Ripple Labs continues, investors are anxiously waiting on a final outcome that will no doubt change the landscape of the crypto space.
Attorney Deaton recently shed some light on what will happen if the final ruling does not go in favor of the blockchain giant. In a lengthy Twitter post, he explained that if Ripple loses on appeal to the SEC, “there won’t be any money collected for years.”
This means that outcome will be long-lasting for XRP holders as there would not be an immediate financial resolution. Also, Ripple will go on to appeal the decision and the process could last anywhere between 2-5 years, according to Deaton.
If Ripple loses to the SEC there won’t be any money collected for years and ONLY if Ripple loses on appeal. If the Supreme Court takes it on appeal (which I believe they will if Congress hasn’t acted by then), I believe Ripple hands down wins with this Supreme Court. If the SEC… https://t.co/0xHw266YXf
— John E Deaton (@JohnEDeaton1) July 6, 2023
Deaton gave the update in response to a question from a member of the XRP community who asked to know what would happen if the case goes in favor of the watchdog.
Potential consequences for Ripple and XRP holders
John Deaton continues by highlighting the ramifications if Ripple fails to win the case against the SEC. According to him, if Ripple loses, the Commission would be entitled to collect the money to the tune of $1.3 billion.
Furthermore, the SEC would offer a “payback” to XRP holders to sell all their XRP tokens. However, Deaton pointed out that the damages that XRP holders will receive if the SEC wins will be significantly reduced.
He stressed that XRP holders could benefit from a regulators fund that is designed to compensate them for their losses. This will also be of great benefit as the lawyers will get between 25-35% of the recovery for attorney fees before the funds are disbursed. This will result in significantly larger payouts for XRP holders.
“Ironically, If there was a recovery, XRP holders would get more money from the SEC fund because in the civil case, the lawyers will get between 25-35% of the recovery for attorney fees BEFORE the costs of the case are deducted from the fund,” Deaton says.