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This Is What Could Happen to XRP Holders If Ripple Loses to SEC

Fri, 07/07/2023 - 09:26
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Gamza Khanzadaev
Ripple v. SEC could leave XRP investors empty-handed for years, legal expert says
This Is What Could Happen to XRP Holders If Ripple Loses to SEC
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As the legal battle between Ripple and the SEC continues, XRP holders anxiously await the outcome and ponder the potential consequences. Attorney John Deaton, representing XRP holders in a class-action lawsuit against the watchdog, recently shed light on what might be at stake for investors if Ripple fails to secure victory.

According to the attorney, if Ripple loses the lawsuit against the SEC, the ramifications for XRP holders could be significant and long-lasting. Deaton predicts that in such a scenario, there would be no immediate financial resolution. Instead, a lengthy process of appeals is expected, which could stretch over a period of 2-5 years.

Consequences and implications

If the SEC emerges victorious, continues Deaton, Ripple would likely appeal the decision, leading to an extended period of legal limbo. Furthermore, even if XRP holders prevail in a separate civil case against Ripple, their chances of obtaining compensation would be jeopardized. Should Ripple exhaust all avenues of appeal and ultimately lose, the SEC would be entitled to collect the funds, estimated to be around $1.3 billion.

XRP Holders Win Right to Sue Ripple, Legal Experts Unveil Implications

The attorney suggests that an SEC victory could significantly reduce the damages that XRP holders might be eligible to receive in the civil case against Ripple. Paradoxically, if the SEC were to recover funds, XRP holders could potentially benefit from a regulator's fund designed to compensate them. This would be particularly advantageous as the lawyers' fees would be deducted before disbursing the funds, potentially resulting in larger payouts for XRP holders.

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About the author

Financial analyst, trader and crypto enthusiast.

Gamza graduated with a degree in finance and credit with a specialization in securities and financial derivatives. He then also completed a master's program in banking and asset management.

He wants to have a hand in covering economic and fintech topics, as well as educate more people about cryptocurrencies and blockchain.