John Deaton, attorney and a known fan of Ripple (XRP), has been in a podcast expressed opinion about the lawsuit between Ripple and the US Securities and Exchange Commission (SEC). According to him, the SEC is not doing well in the lawsuit and the chance that Ripple will walk away with the profit is much higher.
SEC low chance of winning
In the podcast, Deaton says he believes the probability of the SEC winning is less than 3%. This, he says, is partly due to the speech and documents of William Hinman that have been released. Hinman, former SEC director of corporate finance, said in a speech that he Ethereum (ETH) found no effect because it was enough decentralized would be.
The lawsuit was filed because the SEC believes that XRP is a security and cannot be sold without a license. That a former SEC executive has previously expressed that another cryptocurrency is not considered a security may be in favor of Ripple.
In the podcast, Deaton says he believes Ripple’s winning chance is around 25%. According to him, the chance of a ‘splitting the baby’ statement is much higher. ‘Splitting the baby’ is one commonly used term in legal practice which refers to the Christian King Solomon, who used his wisdom to solve cases in resourceful ways.
It means that the judge chooses to take a happy medium and only partially punishes a party. According to Deaton, there’s a 50% chance that Judge Torress will choose to take that middle ground. In the case of the middle ground, it will be judged that XRP was still an asset before 2018, but not after that.
Ruling does not involve secondary market
In any case, according to Deaton, the ruling will not involve the secondary market. Any violations that Ripple would have committed are separate from the trade in already purchased XRP tokens.
“I think XRP itself will not be considered a security (….) even if Judge Torres rules that Ripple has broken the law, that will not affect the secondary market.”
Deaton expects that the lawsuit will not last long. According to him, the lawsuit, which has been pending since December 2020 running, ending before the end of September 2023. The reason he gives for this is that Judge Torres will suffer damage to her career if she doesn’t. If she allowed the lawsuit to run beyond September 2023, she would end up on a so-called ‘six-month list‘.
The list includes names of judges who took more than six months to consider a motion. In the world of justice, ending up on such a list is detrimental to your career. If she ever wanted to move up as a judge, it would be very disadvantageous to be on this list. As a result, she is put under pressure, as it were, which should not be possible in the world of justice.
Ripple fans beware
Deaton expects this final phase of the lawsuit to have a positive effect on XRP’s price. He believes that a value between two and ten dollars seems realistic. He says it is important for Ripple fans to keep an eye out for the release of documents on June 13. On June 13, the Hinman Documents be released. This will include not only the speech, but also emails between Hinman and the Ethereum Foundation.
However, keep in mind that Deaton himself is an XRP holder and fan. Even with the ethereum documents, the court may rule that XRP is not decentralized enough to avoid securities labeling. If XRP gets that stamp, chances are that exchanges will soon remove the coin from their platforms and the price will plummet. We also saw that happen at the end of 2020, when the indictment was announced.