130 Interactions, 2 today
Despite a flurry of motions and responses in recent weeks, speculations of a settlement between Ripple Labs, its executives, and the US Securities and Exchange Commission are never far away. In fact, attorney John Deaton made a similar assertion recently when he stated,
“While the trial lawyers are fighting it out and arguing over almost everything, the settlement lawyers are kicked back trying to find a path of least resistance.”
Now, let us assume that these lawyers have successfully been able to keep the intensity of the lawsuit behind them to push out a settlement. What will such a settlement look like? Attorney Jeremy Hogan is the latest to take a crack at this question, with Hogan asserting that such a likelihood can only be entertained if the settlement involves clauses that satisfy both parties.
Both parties, the attorney argued, will want different results from such a settlement. According to Hogan, the SEC, for instance, will want to put an end to this lawsuit without any damage to their “street cred” with other crypto-companies. This will include not only language enjoining Ripple from any illegal sales in the future, but also a civil penalty to show that “Ripple did something wrong.”
Then, there’s the question of disgorgement. Now, this was something very specific the agency sought when it first charged the San Francisco-based blockchain firm. In fact, Hogan himself had alluded to the same being a key part of the SEC’s prosecution during an interview a few months ago.
However, in the present day,
“There’s just no way to fairly “disgorge” profits to investors because there’s no way of fairly knowing who to “disgorge” to. How would you even come up with a plan to disgorge say a billion dollars that Ripple pays – to who? Plus, there’s that small problem that it was literally your lawsuit that caused the most damage.”
So, what about the defendants? According to Hogan, Ripple would first and foremost seek guarantees that it will be able to retain its business and ODL, with the civil penalty not being severe enough to force bankruptcy.
The first is a particularly noteworthy promise, given that both Garlinghouse and Larsen have previously lamented the lack of regulatory certainty in the United States in order to hint at a shift abroad. It is worth noting, however, that when the story took a “us vs. them” tone later in the interview, the Ripple executive was eager to add that he is “committed to San Francisco.”
Furthermore, the business would want much-needed clarity in the future, clarification on the status of XRP, a development that would signal to the secondary market that the “SEC thing” is officially finished. Such transparency, ideally, should be sufficient to reassure exchanges about re-listing XRP.
It’s worth mentioning here that Hogan also considered two additional solutions, none of which would be ideal for XRP or Ripple. These included potential restrictions on the sale of escrowed XRP and Ripple restricting private sales to just firms and clients, the latter of which is projected to “bottleneck the flow of XRP into the market for years.”