SEC dropping Ripple case is ‘final exclamation mark’ that XRP is not a security — John Deaton

The US Securities and Exchange Commission dropping its appeal against Ripple is the “final exclamation point that these [XRP] tokens are considered digital commodities, not securities,” crypto lawyer John Deaton told Cointelegraph.

Deaton added that there is still a $125-million judgment against Ripple over the improper selling of the XRP (XRP) cryptocurrency, which perhaps the company can negotiate down now that the SEC has dropped its appeal.

Deaton is a well-known lawyer who represented XRP holders, arguing that their interests were not being represented in the SEC’s case against Ripple. He’d later run against Elizabeth Warren, a vocal crypto critic, for a senate seat to represent Massachusetts in Washington, DC.

Related: Why is the Ripple SEC case still ongoing amid a sea of resolutions?

Will Ripple drop its cross-appeal?

One factor that will play out going forward is Ripple’s cross-appeal, which was filed in October 2024. Deaton believes the SEC doesn’t want Ripple to proceed with the cross-appeal because a ruling could hurt the commission’s jurisdiction and affect other cases.

That gives Ripple some leverage in negotiating the settlement. “Everything’s turned,” Deaton said. “The election’s turned, the industry turned, the SEC [has] completely done a 180 as it relates to the industry. Why should we pay $125 million?”

However, there still is the issue of the injunction issued by Judge Analisa Torres, which prevents Ripple from selling XRP to institutional investors to prevent violation of securities laws.

“If Ripple obviously wants to be able to issue XRP to banks in America directly, I think the hang-up is that injunction. How do you get past that injunction?” Deaton said.

Related: XRP’s role in US Digital Asset Stockpile raises questions on token utility — Does it belong?

Ripple case was an attack on the industry

“I remember when this case was first filed,” Deaton told Cointelegraph, adding:

“I thought it was an assault on the industry, like the boot on the neck of the industry, and I was confident that it wasn’t going to be just a one-off, that it wouldn’t just be Ripple, that it was more of a message that the traditional finance, the banking system, the Elizabeth Warrens and the Gary Genslers of the world, had it in for the industry.”

He added that Ripple can appeal to the fact that it never left the US even after the SEC brought the case and that it is an American-made company.

“I think it’s to do with Brad Garlinghouse being able to say, ‘Well, look, we got sued by the US government and the Biden administration; we’re an American-made company, you know, [and] we never left.’ And I think that bodes well.”

Magazine: Hall of Flame: Crypto Banter’s Ran Neuner says Ripple is ‘despicable,’ tips hat to ZachXBT