On Twitter, an australian lawyer commented on John E Deaton’s comments on how the lawsuit will play out in 2023.
On Twitter, an australian lawyer recently commented on John E Deaton’s comments on how the lawsuit will play out in 2023. He noted:
As usual John, that is a very well thought out and reasoned thread. I partly agree and partly disagree with you. As you thought disclosure of the Hinman emails would be a big factor pushing the SEC towards settlement, your view that the SEC now accepts they will be disclosed /1
has an influence on your conclusion about the likelihood of settlement. I agree with you that the Hinman emails are probably not as damaging to the SEC as we thought, although the SEC may be relying on the document being sealed /2
because they are not relevant to the issues in the SJ brief which is what the SEC argue in its motion to seal lodged on 22 December. Success on the sealing motion can buy the SEC more time up to the decision on the SJ motions if the Judge doesn’t consider them in her decision./3
The Hinman documents may still be damaging to the SEC but Ripple being able to leverage this fact for settlement discussions may not become significant until and unless the sealing issue is decided in its favour. As I think Ripple will not win on the sealing issue /4
the short term impact of the Hinman Documents on settlement may not be that great even if they are damaging, but I agree with you anyway that they may not be as damaging as many of us including me had hoped. /5
I do not agree however that this means there will not be a settlement or it makes it less likely. You refer to the LBRY case may be emboldening the SEC but in this case LBRY did not argue the first and second prongs of Howey and the SEC really relies on getting way with /6
its stretching of the common enterprise not being challenged by a defendant (as inevitably it is not challenged in settlements) or not scrutinized by the Court when not challenged (as LBRY did not challenge it). There is a lot for the SEC to lose if Ripple’s arguments /7
on the blue sky cases issue & common enterprise are accepted by Judge Torres. The stakes for both parties are high and this consideration or the risks of losing should only be more stark to both parties with the SJ motions having been fully briefed. /8
It seems to me that if the SEC lost the contract/blue sky issue it would have an impact on the SEC in terms of limiting its reach beyond not only cryptos but to other assets. /9
and losing on common enterprise against Ripple will undermine its plan to extend its reach to secondary market trading of crypto because it wants the term to be so broad to cover all offerings of a token. /10
The eventual possible release of the Hinman documents is just a part of the risk basket for the SEC in deciding on settlement, whether or not there is damaging content in one or more of the documents. /11