In the midst of ongoing legal battles for Ripple Labs, a victory in the SEC case could potentially invalidate the current class-action lawsuit, according to John E. Deaton
The current class-action lawsuit against Ripple Labs, its CEO Brad Garlinghouse, and subsidiary XRP II, may be less of a concern for the company than anticipated, according to XRP-friendly lawyer John E. Deaton.
In a recent tweet, Deaton suggested that the plaintiffs’ attorneys should be hoping for a Ripple victory in the ongoing SEC case, as a comprehensive SEC victory could lead to the establishment of a fund to pay XRP holders, consequently undermining the class-action lawsuit.
Deaton further explained that if the SEC were to triumph entirely, it would be the agency collecting the money, not the plaintiffs in the class-action suit.
The crux of both the SEC and class action cases rests on the determination of whether XRP, the Ripple-affiliated cryptocurrency, is considered a security. This crucial question has been at the center of Ripple’s legal challenges in recent years.
Addressing concerns from international XRP holders, Deaton clarified that the certified classes in the class-action lawsuit apply only to US investors. He referred to the Financial Conduct Authority (FCA) in the UK, and equivalent bodies in Japan, Singapore, and the UAE, which have declared XRP is not a security. Consequently, the certification does not affect XRP holders in these jurisdictions.
Ripple Labs currently faces both the SEC lawsuit and the certified class-action, and Deaton’s comments suggest the former may hold more significant consequences for the company.
A Ripple victory in the SEC case could not only transform the landscape for the class-action but also have wide-ranging effects on the categorization and regulation of cryptocurrencies.